Department’s Budget and Strategic Plan 2007/8 briefing

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
13 March 2007
DEPARTMENT’S BUDGET AND STRATEGIC PLAN 2007/8 BRIEFING

Chairperson: Mr S Tsenoli (ANC)

Documents handed out:
Address by acting Director-General, Mr Elroy Africa
Budget review by the Acting Financial Officer Mr Sigaba
Presentation by the Deputy Director General: Corporate Services Mr Faba
Monitoring and Evaluation by Ms Mketi
Governance, Policy, and Research by Mr D Powell
Urban and Rural Development by Ms B Leon
Systems and capacity Building by Ms S Makotoko
National Disaster Management Centre by Mr L Wiliiams
Free Basic Services and Infrastructure by Mr Yusuf Patel

Audio recording of the meeting

SUMMARY
The various branches of the Department of Provincial and Local Government briefed the Committee on their objectives and strategic goals, their performance in 2006/07, and the budgets and expected outputs for the 2007/08 financial year. A general presentation was given on the Department and the budget. The core events were the launching of Project Consolidate, the enactment of the Intergovernmental Framework Act, the second democratic municipal elections held on 1 March and the adoption of the 5-year Local Government Strategic Plan. DPLG had made good progress in broadening access to basic services to local communities. It had improved the financial viability and the resident financial management capability of municipalities. Project Consolidate had supported over 75 municipalities. The national framework on Local Economic Development had been launched, and municipal performance management regulations had been drawn. The Department would given hands-on support to local government, and ensure that government was coordinated to reach targets. There would be a comprehensive review, addressed in White Papers on Local Government and on Provincial Government. The budget over the next three years was tabled. A total of R121.7 billion was allocated to local government, R68.2billion to the local government equitable share, R24.7 billion for Municipal Infrastructure Grant and R8.4 billion to stadium development. The seven programmes were tabled and the expenditure for each tabled. Questions by members focused on the capital assets drop, which was due to a once-off high expenditure, the budgets for the CRL Commission, the RSC levies and replacement systems, and the problems in recruiting and retaining staff.

The Corporate Services Branch summarised that the strategic objectives included improving customer service and service delivery, enhancing implementation and monitoring, developing a comprehensive Human Resource Management and Development Strategy, and aligning planning to the needs of the organisation. The staffing profile was tabled. The budget was R113.5 million. Several questions by members related to the vacancy rate, the steps to redress gender imbalance, and the strategies for retention.

The Monitoring and Evaluation Branch was to monitor performance, evaluate service delivery, communicate development and strengthen the organisational capacity. Quarterly review meetings were held, and planning involved alignment of a number of documents. Readiness assessments had been conducted in local governments and a national workshop aimed to standardise procedures and approaches. Attempts were made to increase understanding of audit plans. Planning processes needed to be more closely aligned and a Forum had been established to try to develop a compendium of indicators. Questions by members related to staff complements in the branch, the composition and function of the legal unit, and compliance.

The Policy and Research, Branch detailed the outputs for 2006/07 and noted that a summit on corporate governance would be held in May. The Branch would focus on intergovernmental processes and integrated development planning. There had been improvements in the integrated development planning processes. Donor funds were explained and the work in the Southern African Development Community was explained.
The Chief Directorate of the Traditional Leadership Institution was to finalise the Act and provincial legislation relating to the traditional leaders. Questions by members related to the assessments, the work in the Congo, the progress with the Khoi San, the work of Project Consolidate, and establishment of the traditional houses in the provinces.

The Urban and Rural Development branch said that its core functions related to the Urban Renewal Programme and the Integrated Sustainable Rural Development Programme. The branch would work on guidelines and frameworks to try and structure more coordination between the different stakeholders, and would work with sectors at national and provincial levels to assist and support the nodes. It gave workshops and technical assistance, and had developed partnerships with various institutions. Members raised queries on the reporting chain for the IDT, housing problems, whether there would be expansion of the nodes, contribution by other departments, subsidies to farmers, and the multi purpose community centres.

The Systems and Capacity Building Branch had improved since last year on the management grant issues of the implementation of the Act, had done support work on the Property Rates Act, and on a Municipal Leadership Development Programme. Competency Guidelines had been gazetted. It had launched the local government anti-corruption strategy and piloted an implementation plan in 13 municipalities. Youth development was not budgeted for but was being done. Members asked for clarity on the future allocations for Project Consolidate, the disability component of staff, the allocations to disaster relief, the progress on Councillor remuneration and local government equity.

The Disaster Management Branch tabled its achievements. The main focus areas were a successful Eastern Cape pilot project and successful implementation of the Working on Fire programme. A system had been established to get response from the disaster management centre and it was hoped to develop an early warning system. It would be working on contingency guidelines for 2010. Questions by Members related to indigenous knowledge systems, services during drought, the use of airforce aircraft, and whether permission was required for an early warning system.

Further questions, and the briefing by the Free Basic services and Infrastructure Branch, were postponed to another day.

MINUTES
The Chairperson noted an apology from the Minister.

Strategic Overview Briefing by the Department of Provincial and Local Government (DPLG)
Mr Elroy Africa, Acting Director General, highlighted the four key events that had sharpened the programme of the Department. These were the launching of Project Consolidate, the enactment of the Intergovernmental Framework Act, the second democratic municipal elections held on 1 March and the adoption of the 5-year Local Government Strategic Plan.. DPLG had made good progress in broadening access to basic services to local communities. Free basic water was provided to 85% of houses and 58% were receiving free basic electricity. The Department was involved with other stakeholders to improve the financial viability and the resident financial management capability of municipalities. One example was the implementation of the Property Rates Act. Project Consolidate had supported over 75 municipalities to improve their financial management systems, policies and procedures.

He informed the committee that DPLG had launched the national framework on Local Economic Development (LED) to ensure that municipalities participate, and had launched municipal performance management regulations to accelerate and standardise the process of recruitment and appointment of critical management posts. Core municipal systems and cross cutting initiatives constituted the foundation of the support for ongoing municipal transformation. The Presidential Imbizo was in line with the interventions of Project Consolidate so as to deepen community participation in governance. DPLG had also developed a draft national support plan for the institution of traditional leadership.

Mr Africa stated that the main focus would be on giving hands-on support to local government, addressing the structure and governance arrangements of the state and refining and strengthening the policy regulatory and fiscal environment for local government. There would be renewed focus on ensuring that government was coordinated to meet its targets. The Department had been mandated by the Lekgotla to ensure that municipalities had the fiscal resources to recruit, absorb and retain skills, to review the White Paper on Local Government by 2008 and to undertake a comprehensive review of provincial government, to be incorporated in a further White Paper on Provincial Government, by 2008.

Over the next three years a total of R121.7 billion would go to local government. R68.2billion would go through the local government equitable share, R24.7 billion for Municipal Infrastructure Grant (MIG) and R8.4 billion to stadium development for 2010 FIFA Soccer World Cup. He delineated the amount that was going to be given to the six public entities and associated institutions that the department was responsible for.

Financial Overview Briefing
Mr Mbulelo Sigaba, Acting Chief Financial Officer, gave the budget review of the department. He noted that the department was continuously on the search for efficient methods to finance local governments so that each municipality had a sufficient base to fulfill its municipal mandate. The revised equitable share was implemented in 2007/08 with additional R660 million added to the normal share. The focus of the review was the assessment of the impact and the implementation of the new property legislation and the alignment of functions and fiscal powers between category B and C municipalities.

Slide 1 listed the seven programmes the department had to fulfill its mandate. Slide 2 focused on the amount DPLG would spend compensating employees, amounting to R149million. Goods and services had an allocation of about R202million, and operation leases had reduced from R36 to R24 million, due to a re-listing on disaster management. Slide 3 indicated the major line items and was intended to improve the municipalities’ extension of free basic services to poor households, remuneration of local councilors and to improve governance and administrative systems. The conditional grants were the R200million for the municipal systems improvement programme (MSIP) and the R7.5million for the municipal infrastructure grant (MIG). Mr Sigaba stated that the MSIP would focus on stabilising municipal and government systems, planning in communities, reviewing developmental plans and managing support centres. The MIG was supposed to put municipalities in a better position to provide infrastructure that would enable the roll out of free basic services, alleviating poverty, backlogs and regional disparities. The grant also sought to stimulate job creation.

Slide 4 detailed the amounts DPLG would transfer to their six public entities. In the coming two weeks the respective accounting officials of the six entities would be presenting their budgets. .Slide 5 showed the equitable share which was at R18 billion, R7 billion higher than in the previous year. Slide 7 showed the breakdown of the MIG allocation. R1 billion was allocated for eradication of the bucket system by December 2007. Water and sanitation took up the bulk of the money at R3.5billion and R1.1billion respectively. R972 million was allocated for public municipal service infrastructure.

Slide 8 showed the MIG breakdown per province. It was noted that the figures differed largely because of the bucket eradication. 187 municipalities were receiving the MIG grant .

Discussion
Mr P Smith (IFP) remarked that he did not understand the perception that the municipalities were unable to spend funds because they had already spent about 54% over six months for 2006/07. He asked why the capital assets transfers and subsidies were dropping from R 7.6 to R5.2 million, and why they remained low for the current year thereafter.

Mr Sigaba replied that DPLG had to implement a satellite tracking system for the disaster management. This resulted in the high once off expenditure, but now the capital assets were going back to their baseline and were in effect not being reduced. In addition some of their staff were moving into new complexes at the time so that DPLG had needed to install new telephones and computers.

Mr Smith asked if the budget for the Commission was the same as the budget for the National House of Traditional Leaders. Moreover, he did not understand why the Commission had a budget when it was created by statue and had its own staff complement.

Mr Sigaba replied that the Commission for the Promotion and Protection of the rights of Cultural, Religious and Linguistic Communities of Cultural and Linguistic Rights (CRL) had a five year tenure. Because the Commissioners were required to undertake substantial travelling, and in order to encourage the participation of Commissioners, there was a larger budget allocated.

Mr Smith asked if the beneficiaries of the RSC replacement grant were the same as the recipients of the RSC levies.

Mr T Fosi, Chief Director, DPLG, replied that part of the work on powers and functions was being assisted by the National Treasury (NT), and this included joint work on the RSC replacement levy. DPLG was identifying the appropriate function to be performed by the district municipalities and out of this they would be then able to look at alternative funding mechanisms. Some of the work was cross cutting over the functions of the district municipalities and discussion with NT to ensure that these core functions were funded.

The Chairperson asked what had been proposed for replacement for the RSC levies, and what time frame was attached.

Ms S Makotoko, Acting Deputy Director: Systems and Capacity Building, DPLG replied that the grants were just transitional and whether they were seeking to replace the RSC levies was still very unclear. DPLG was seeking to allow municipalities to take the initiative in imposing certain taxes in line with section 299 of the Constitution. This was currently in the Bill that was published on the NT website. DPLG, in line with its work on powers and functions, also tried to set up a mechanism of tax sharing and regulating the municipalities' charging system. DPLG considered that the better option in the long run was to define the role of the district , of governance and how these functionaries were going to be funded. With regard to the municipal regulations, DPLG was working on two sets but was not necessarily limited to this. The first set was published for implementation last year and it dealt with the administration of the legislation and other comprehensive issues. The second set required more detailed work, as the Minister was required to impose upper limits. There still needed to be more information and DPLG was working with NT to come up with a uniform system on how the Act was to be implemented. Should be released for comment in 2007.

The Chairperson asked if DPLG could explain more on the Provincial White Paper.

Mr Africa replied that the White Paper for the Local and Provincial Governments went together. DPLG, when first reviewing the matter in January 2006 had agreed that the fundamental objectives and policies of the White Paper were correct. However, there were lessons that had emerged from 10-years of local governance and more recently the integration into the local government into intergovernmental systems. These had pointed to the need to take stock of the functional arrangement between the local and provincial governments. This allowed DPLG to deal with various issues. It now better understood the functionality between the various levels of government. There were discussions on the housing function of the Breaking new Ground policy, which was generally taken to be the domain of the local government but was allocated to the provinces. It was also looking into the oversight and support of the provincial government to the local government. The greatest reason to have the Provincial White Paper was to create stability and certainty in the system. It would deal with the delivery linkages. It was a work in progress and DPLG was still to engage with others on it.

The Chairperson wondered why in neither of their meetings was there reference to the other entities such as South African Local Government Association (SALGA) as such information would be helpful. He noted how the spending was affected by lack of capacity and understood that DPLG was having problems with staff deployment and high turnover in municipalities. He asked how this affected the work.

Mr W Doman (DA) in addition remarked that there had been some suggestion that if all municipalities appointed the approved staff complement and worked to budget they would be able to employ between twenty and thirty thousand people. He commented that this was an area to focus on.

Ms Makotoko replied that they at one point DPLG used to have what was called a discretionary portion in every grant received. This discretionary portion was used for recruitment. However, this was stopped by NT. The current R200 million budget was clearly not enough and it was not earmarked to recruit the requisite staff. She emphasised that when it came to recruitment it was more a case of remuneration that caused difficulty than hiring. DPLG was therefore working on a remuneration framework to deal with the issue.

The Chairperson asked how the monitoring was progressing and how DPLG responded to any queries about a particular municipality.

Mr Doman asked if DPLG could further detail the issue of mixed spending.

Mr Doman asked the Department to comment on why it had reached only 85 of the 136 municipalities with experts, and whether this was because it did not have enough staff with expertise to deploy. He noted that this was supposed to be a two year programme. |

Mr Doman remarked that he was not worried that the monies only were spent after the end of the financial year, as long as spending fell into a firm pattern.

Mr Doman asked what assistance DPLG would be giving in terms of reporting and audit, since the new systems of reporting would doubtless be creating problems in compliance.

Mr Doman asked where the district municipalities received their revenues from as it was clear that 90% of their budget was from grant transfers.

Mr M Lekgoro (ANC) asked where the MIU deployed the resources they needed to do their function.

Mr Legkoro asked for the exact job of the airplanes DPLG would be hiring for disaster management.

Mr Smith asked exactly how were DPLG functioning since they were understaffed, and whether it was understaffed because of their conditional mandate or because of the output.

Mr Africa replied that the questions raised were all relevant, and the decision taken by the Cabinet Lekgotla was focused on DPLG needing to explore the area of recruiting, retaining and absorbing necessary skills into the municipalities. However, he regretfully had to acknowledge that DPLG still did not have the answer. There were a number of avenues that were being explored but these were still not sustainable models. DPLG hoped that by next year they would bring back a better answer.

The Chairperson asked if their relationship with civil bodies existed, and if they had any critic of their budgets.

Mr D Kekana (ANC) asked if DPLG really needed to hire a private airplane, especially considering that various army aircrafts were grounded. He was of the opinion that if DPLG requested the help of the army it would receive it.

Mr Africa replied that he was confident that all of the questions could be fully answered in all the presentations.

Briefing by the Corporate Services Branch
Mr Tozi Faba, Deputy Director General: Corporate Services, concentrated on the key issues at the request of the Chairperson. He indicated that the purpose, strategic objectives, sub-programmes , achievements and strategic priorities were outlined in the documents provided. He referred also to the achievements against 2006/07 outputs and summarised that the strategic objectives included improving customer service and service delivery, enhancing implementation and monitoring, developing a comprehensive Human Resource Management and Development Strategy, and aligning planning to the needs of the organisation. He moved straight to the staffing structure and profile that set out the post levels and those occupying the posts, broken down by race and gender. On 1 April 2006 the number of approved posts was 472, the number of filled posts 399, and number of vacancies 73. As of 28 February 2007 the number of approved posts was 500, number of filled posts 400 and the number of vacancies 100. He noted the representativity profile compared with public service targets, and reported that DPLG was working to bring on board more women and disabled.

Mr Faba tabled the budget for Corporate Services, and reported that the budget was R113.5 million, broken down across a number of sub programmes. There was an increase of 19.6% for administration because of increases in the management structure of the offices, provision for telecommunication and copy services and the transfer of the function of property management from the Department of Public Works to all national departments. He assured the Committee that the money would be used efficiently and in a trustworthy manner.

Discussion
Mr Smith asked what outcomes were being compromised by the Department having a vacancy of 41 posts and the people not doing what they were supposed to do.

Mr Faba replied that DPLG certainly suffered because of these posts. The results were the need for longer working hours, but this had the advantage of actually getting the work done, because when people were understaffed they normally concentrated better on what was supposed to be accomplished. He added that there were two vacancies in his Department that had been advertised. He was presently having to conduct interviews for the third time because he could not find the right person for the job. This meant that he himself had needed to do the work in the vacant posts at another branch, which was far from ideal.

Mr Smith remarked that this was not satisfactory because if the answer to vacancies was that the DPLG would make a plan, then there was no point in keeping the posts and trying to fill them. He believed that this would only have the effect of undermining output and quality of the work. He asked what DPLG was doing to fill the posts.

Mr Faba replied that DPLG advertised as frequently as possible but this was very costly because sometimes it had to advertise the posts more than once. Most was done in the weekend newspapers, but he thought that advertising internally was better than doing it externally.

The Chairperson asked how long it was intended to take to fill the vacancies.

Mr Faba replied that post levels 1 to 12 were not much of a problem but the senior management posts took up to three to four months as some posts needed government approval, or setting up the panel, or conducting various tests. The process was long and time consuming.

Mr Lekgoro remarked that the statistics showed that DPLG still had a long way to go in gender balance, because they had thus far failed to meet the targets, in senior and management levels.

The Chairperson also wanted to know what practical steps DPLG would take to meet the targets for gender and disability.

Mr Faba replied that he was passionate about gender and people with disabilities. He had discovered that the best way to do this was to contact the provincial desk and inform them of the posts. His Department was very passionate about gender and was trying to fill the posts as required. He personally had contacted the provinces sensitising them on the posts so that they encouraged people to apply. He also used to be in touch with disability organisations, but now was dealing only with the provincial offices.

Ms Tumi Mketi, Deputy Director General: Monitoring and Evaluation, DPLG, added that last year the Committee had commended DPLG for reaching their target. The bar had been raised from 35% to 50% and the same approach was being used. There were a number of female senior managers who had left and the policy was to fill their posts with another female. She was very confident that the situation would have substantially improved.

The Chairperson asked for the number of people who had left, and their breakdown.

Mr Faba replied that DPLG had resignations from two senior officials. Another problem was that there was mobility between jobs. Most of the people leaving were leaving for better remuneration and DPLG did not find it effective to keep counter-offering. Of the 44 people who had resigned, 15 had been from senior management and 29 below that level. 27 had been promoted.

The Chairperson hoped that one of the Department’s retention strategies would continue to be using counter-offers. He asked about the ICT forum and their time frames.

Mr Faba replied that eight had been established, and DPLG's target was that all municipalities should be linked and have their own website. This was difficult because DPLG would go to a municipality and would discover that there were one or two computers only. The answer to this was to broaden the minds of the personnel. By next time the target for ICT would have reached 90% since it had a full ICT staff complement.

Briefing by the Monitoring and Evaluation Branch
Ms Tumi Mketi briefed the Committee on the Monitoring and Evaluation branch, indicating the achievements in the 2006/07 financial year. She concentrated on the strategic objectives that informed the programme, which were to monitor performance, evaluate service delivery and communicate development. the organisational capacity and capability was to be strengthened. On the issue of planning, DPLG had submitted the three-year Medium Term Performance Plan (MTPP) and had developed and submitted the Annual Report on time. There was coordinated implementation of business plans and alignment of strategic documents, being the MTPP, the five year local government agenda and the five-year Strategic Plan of the DPLG. The Annual Report had improved both in content and overall presentation. The unit was better able to monitor the work of the organisational performance through quarterly review meetings and that also involved the implementation of the business plans. The other planning issue involved alignment of all different planning documents. They were working through strategic documents and making sure that there was synchronization

DPLG had conducted a readiness assessment in the provincial department of the local governments, to assess the capacity level for monitoring work in provinces and had convened the national Monitoring and Evaluation workshop. This aimed to try to standardise the processes and approaches, using the local government strategic agenda as a guide. Six provinces were able to establish their own M&E forums. A set of indicator tools for Project Consolidate had been developed.

With regard to good governance and compliance the Committee was aware that DPLG had struggled in the past to understand audit work because it was understaffed. It had recently recruited and a number of audit plans were developed. Unfortunately managers were still not able to understand the audit work fully. DPLG was working closely on this and there would be a capacity building drive with the sole purpose of capacitating the managers, so that they were better able to understand audit work. There was appreciation of their work by NT and the Auditor General, who sometimes referred them to assist other departments. A risk management scheme had been developed and rolled out.

Another challenge was the cluster liaison strategy, but the legal unit provided the needed support towards the realignment of the provincial boundaries. DPLG was assisting the Minister in carrying out the role as a Board Member of the Local Organising Committee for 2010. Fragmented planning processes had provided a challenge in the past year. Monitoring and evaluation was hindered by problems of capacity. Since these issues cut across all three spheres of government, the Forum had been established to share input with the provinces and develop a compendium of indicators.

Discussion
The Chairperson asked which provinces had been more transparent than others.

Ms Mketi replied that the provinces were North West, Eastern Cape and Northern Cape.

Mr Smith asked if the branch was fully staffed.

Ms Mketi replied that this unit was in the process of staffing the branch and was working closely with the CFO to make sure that the requisite resources were provided to carry out the work.

Mr Smith asked what the approved staff complement of the branch was, and the current staff complement.

Ms Mketi replied that the approved staff complement was 35. She reminded the committee that M&E was a combination of the corporate planning unit, internal audit and risk, legal unit and the corporate secretarial unit. All of these were fully staffed. The weakest link was the Chief Directorate that had four people. The structure of the unit was agreed to be weak and was under review.

The Chairperson asked what the GNA was.

Ms Mketi replied that this was the governance and administration cluster.

Mr Smith asked for the composition of the legal unit, its aims and what support it provided.

Dr Petra Bouwer (DPLG Legal Services Executive Manager) replied that legal unit comprised of two directorates, one for direct legal support and the other for contract management and due diligence. All staff were trained as lawyers, but the ones in contract management dealt with those issues only. The focus had already extended externally. For instance the contract management unit had assisted in the financial year with development of an early warning system to pick up on reports that should come out of municipalities. This had been rolled out. Institutional compliance issues had been included for the forthcoming financial year and it had endeavoured to include in the business plan a particular component which would be responsible for a particular compliance system. He added that currently it was a mix of internal and external support. There was an approved staff complement of four; three in the legal unit and one in the contract management unit.

The Chairperson remarked that he understood the issue of compliance as relating to the mandate of integration and thereby minimising the administration strain of the municipalities. Municipalities were using too much of their time in reporting to departments.

Dr Bouwer replied that this was the responsibility if the whole Department. There needed to be needed some kind of alignment with legislation in regard to the issue of compliance. Review of the White Paper would add to this and DPLG had already worked on a mechanism that would help municipalities to align their issues of compliance.

Briefing by the Governance, Policy and Research Branch
Mr Derek Powell, Deputy Director General: Governance, Policy and Research, DPLG, tabled, but did not discuss, the purpose of the programme, and the performance in 2006/07. He then presented a number of slides dealing with the outputs for 2007/8, divided into the directorates of Intergovernmental Relations, Development Planning, International and Donor Relations, Local Economic Development and Traditional Leadership and Institutions.

Intergovernmental Relations was to support the implementation of the intergovernmental legislation adopted in 2005, and a variety of tool kits and guidelines had been developed to help implement the Act. A summit of corporate governance would be held in May. It would continue to routinely report on the implementation of the Act.

The Department would focus on the intergovernmental process which this unit had mobilized and supported, and would deal with integrated development planning (IDP) in conjunction also with the Presidency. The planning unit was the busiest unit. It had developed a credibility framework to assess IDPs, and would examine public participation. There had been significant improvement in the IDP processes since engagements over the last two years. Some provinces had actually established their own IDPs and were sustaining the momentum. The IDP process had helped in some way to achieve an integrated capital plan which was one of their core targets.

Donor funds were being used to recruit technical expertise, which would then be deployed out to about 21 municipalities. Specially targeted planning was important because of the unique history of the country. DPLG was still struggling to come into terms with its responsibilities in supporting South African foreign policy. There were increasing requests for assistance from several other countries. The Chief Directorate was responsible for establishment of a local government desk in the Southern African Development Community (SADC), which was a complex issue. It would also support the bi- national election in the Congo. It would assist in legislation on decentralization, from a technical standpoint, and would be establishing a more permanent commission in the ARC. Donor funding was to be coordinated, and there was some suggestion that there should be inter-government level work. The net donor value had increased.

Local economic development was a function under the developmental planning unit and worked on placing understanding of economic development into a single compendium. They had developed and launched the economic cluster and they had been working with growth development workshops.

The Chief Directorate of the Traditional Leadership Institution was to finalize the Act and provincial legislation relating to the traditional leaders. Their focus area was the national support programme of the traditional leaders and its resubmission to cabinet.

The budget was stable but growing, and for 2007/08 was at R30.6 million across all programmes. This branch was strong with only one vacancy that had arisen through a promotion.

Discussion
Mr Smith said that there were three provinces that failed to submit data. He asked whether those had ever submitted the IDP data, or if their failure was a one-off.

Mr Powell replied that the Department had a high, medium and low standard and around 50% of IDPs were credible. DPLG could not validate any municipality but at the same time they did not rely only on the information provided by the provinces. The report he had referred to was that on the five year strategic agenda. DPLG suspected that some of the figures should be higher than reported, but this was an issue it was trying to improve on.

Mr Smith remarked that a 27% increase was an improvement but this was still low considering that the programme had been in place for the last 7 years.

Mr Smith asked to what extent the legislation they worked on in the DRC mirrored the South African legislation, and what real support was provided as he was not aware that South Africa had many French speaking advisors.

Mr Powell replied that the legislation did not mirror the South African system as it was based on a French system. There was no question of discussing the Bill with the DRC parliament.

Mr Smith asked on the progress with the Khoi San in respect of the traditional leadership.

Prof M Sobahle, Executive Manager, DPLG replied that this was a concurrent issue dealt with by the national and provincial governments. In respect of the Khoi San, the national government was mandated to craft a document, which had been done. The Minister still needed to be consulted and the document finalised with the relevant political advisors. There was also ongoing consultation with the Khoi San community. .

Mr M Nonkonyana (ANC) said that he was interested in the municipalities' dealings with Project Consolidate and asked whether there were nodal points that had made any progress in the past year.

Mr Powell replied that he could not recall the specific data off hand but could send it on.

Mr Nonkonyana asked if the budget for the Mpumalanga, KwaZulu-Natal and North West traditional houses had been established and whether they were fully operational. He reminded the Committee that in terms of the 2003 Act these should have been established a long time ago.

Prof Sobahle informed the Committee that he would have to revert to it on this question. Part of the support did relate to establishing the local houses. He added that the White Paper stated that the national department should be responsible for the establishment of the houses. However, requests for the funding to NT were rejected twice and National Department was told this was the responsibility of the provinces. KwaZulu-Natal and Northern Cape took the initiative to do this and the last remaining three promised them that by the end of this year their legislation would be in order. It was hoped that by the end of the year they should have met their target.

Mr Nonkonyana asked whether there was any budget from the national coffers.

Mr Sobahle replied that the budget for the local houses was derived from the provincial budget.

Mr Doman asked how assistance was given to municipalities in need of help and whether this did not lead to duplication of work.

Mr Powell replied that the approach was such that they could provide the necessary help without without necessarily duplicating what the provinces were doing, and without trying to substitute it. DPLG co-chaired the panel engagements and it would focus on the national aspects, and the provinces on the provincial. It was trying to use the process as a push to the intergovernmental machinery.

Mr Legkoro asked why there was apparently a drop in the budget for the DRC.

Mr Powell replied that although it looked as if the budget had declined this was not so. The previous year had had a substantial budget adjustment as a one-off.

Mr Legkoro asked for a better explanation of the assistance given to the DRC.

Mr Powell replied that besides the agreement between the two heads of state DPLG had its own memorandum of understanding to provide the technical assistance in the drafting, from the research point of view, rather than the writing of legislation. Although DPLG worked under the DRC officials, there was no monetary assistance.

Briefing by the Urban and Rural Development Branch
Ms Bernadette Leon, Acting Deputy Director General, Urban and Rural Development, DPLG, noted that the core functions of the branch were coordination and integration of the different spheres of government, and monitoring, evaluation and reporting on the Urban Renewal Programme (URP) and the Integrated Sustainable Rural Development Programme (ISRDP). The strategic achievements were fully set out in the slides. She summarised that the branch would work on guidelines and frameworks to try and structure more coordination between the different stake holders, would work with sector levels at national and provincial levels of the department to assist work with the nodes, and to work with donors and private sectors to support the nodes.

This unit held induction workshops to brief new Councillors, had drawn guidelines on sector development, and had implemented the URP, whilst also developing a toolkit for nodal managers who were unable to drive the programme on their own. Technical support was given to the rural nodes, and specific expertise was given where resources allowed for this. It had to work with provincial departments and help them with forward planning. There were comprehensive reports available.

The branch had established a partnership with Development Bank of South Africa to support monitoring and evaluation, another with the National Development Agency to support the nodes, and partnerships with Business Trust and the Development Trust to support nodal economic development. Other initiatives related to research, communications conferences, newsletters and mobilisation of support for the Department of Communications.

The strategic achievements and key strategic priorities were set out. In the forthcoming year the Branch would continue to work with the Business Trust and National Development Agency, who had provided funding for the rural nodes, and would also provide technical support to urban nodes, and work with training institutions to provide entrepreneurial support for nodal communities.

Lastly the budget for the MTEF was tabled. There were 13 posts in the branch, of which 10 were technical and management and three were vacant. The budget across all subprogrammes for 2007/08 was R11.2 million, fairly evenly spread.

Discussion
Mr Nonkonyana asked whether IDT reported to the Department.

Ms Leon replied that IDT was not an agent of the DPLG and did not report to them. It was acting as an agent of Department of Public Works but acted under a Memorandum of Understanding in terms of which IDT would provide support to the nodes. She added that it was a long standing relationship which DPLG tried to improve on every year.

Ms B Mdaka, Executive Manager, DPLG added that IDT reported back to Public Works but they also did work for other Departments such as Social Development.

Mr Nonkonyana commented that he was very impressed with how the Department had dealt with the rural nodal schools.

Mr Smith asked whether the programme would take a positive role in the problem that in the rural areas agriculture was less viable.

Ms L Mashiane asked what DPLG were doing with the Ingonyama Trust in terms of the urban renewal and if this would alleviate the housing problem in the area.

Ms Mdaka replied that housing problems related to Umsinga, and she agreed that land was a problem in Umzinyati as it was one of the weak municipalities that needed help. Land was a problem in all the nodal areas and the rate of solving these issues was slow. DPLG had suggested that the political champion in the Department of Land Affairs also look into land related issues in all the nodes as part of his job.

Mr Doman asked if the successful nodes would be expanded or if DPLG would likely decide on something entirely different.

Ms Leon replied that in the last two years there had been a discussion to expand the nodes, but DPLG had decided against this. This had been a pilot project for 10 years and all ideas and lessons from this programme would be used over the whole country. At this stage, although it was not the intention to create new nodes, there was no strategy to de-node.

Mr Doman asked what the other departments were contributing to the budget on nodes.

Ms Leon replied that it was difficult to give the exact numbers, but, as a result of significant lobbying, there were responses from national sector departments.

Mr Doman asked how the branch advertised the position of the urban developer as an equal opportunity post.

Ms Leon replied that the post advertised was for the Chief Director for Urban Development they were expecting the person to have about five to ten years in urban development. They had not had success in the first two interviews, but were advertising for the third time and now the position was going to be filled.

Mr Doman asked for the political champions who were not performing

Ms Leon said that she would have to provide this response later.

Mr Kekana asked whether the Department was looking to provide subsidies to areas where subsistence farming had almost disappeared, and pointed out that Afrikaner farmers had been successful as they had received government subsidies.

Ms Leon replied that this question was too detailed for her to respond to at this stage. The question had been raised in economic search profiles, particularly in areas where there had been land restitution. She knew that in the areas of food and urban gardening there were many departments involved, which required improved coordination, but she did not have the exact answers on this issue.

Ms Mdaka added that only the Eastern Cape nodes were heavily involved in agriculture, in the areas of maize production and livestock improvement programmes. The major challenges they were facing included marketing and accessing the markets . The Department of Agriculture was working with them on a programme of recapitalisation, which would assist families that might own sizeable land, where the Department would provide the necessary tools for agricultural programmes. This still needed improvement.

The Chairperson asked about the state of functionality of the multi purpose community centres (MPCC).

Ms Mdaka replied that this was a challenge. Some were functioning well whilst others were not. There were reasonable programmes but the key challenge was accessibility, and as a result access roads needed to be built.

Briefing by Systems and Capacity Building Branch
Ms Shiva Makotoko, Acting Deputy Director General, Systems and Capacity Building, DPLG briefed the Committee on the achievements in 2006. This branch had promised to improve on the management grant issues of the implementation of the Act. It had done everything except for the HIV strategy and the local government gender policy, which had not been published because the units had only been newly established. This would be achieved by the second quarter.

Ms Makotoko reported that the branch had even done some work that was not budgeted for, including a support programme to assist with the Property Rates Act, and a proposal had been submitted to NT for creation of a developmental component in the equitable share, to go to the municipalities that were poor instead to areas that were already underdeveloped had been some problems with the implementation of the Municipal Systems Infrastructure Grant (MSIG) and a number of service providers had been asked to assist municipalities. The Municipal Leadership Development Programme would be launched that week. The Competency Guidelines had been gazetted.

The Branch had furthermore launched the local government anti- corruption strategy and piloted the implementation plan in 13 municipalities. More would be done in the next year. Work had been completed on the local government amendment clause, which was currently with Cabinet. Work had commenced on common conditions of services in local government, and a policy document had been developed. The HIV framework was to be aligned with the national strategy in due course. The branch had convened the women and gender conference, and women's participation had risen from 20% to 40%. One area not included in the programme, but where work was done in any event, was in youth development.

The budget for the branch was tabled. Some areas had earlier been highlighted by Mr Africa. Those areas highlighted in red showed decline because there had previously been a one-off adjusted appropriation. The budget across all subprogrammes was R126.2 million, with the largest allocation to Disaster management and Project Consolidate. Focus areas in the forthcoming years were building capacity in performance management, improving on human resource matters, supporting and monitoring the capacity to account for public resources, supporting and monitoring the implementation of the Municipal Property Rates, and developing a framework to improve the financial ability of municipalities.

Discussion
Mr Smith asked why Project Consolidate did not have an allocation for the future.

Mr Africa replied that Project Consolidate was launched as a two year initiative but was currently into a three year time frame. There had been discussion about the transition of Project Consolidate into a five year local government strategic agenda, incorporating the lessons learned into a five-year plan. Although the budget for Project Consolidate ended in the current year, the budget for capacity building experienced an increase thereafter so this was part of mainstreaming the work.

Mr Smith was not ware of the regulations on performance management, but was concerned that the level of compliance was low or absent altogether. He wondered if all these issues were covered in the performance management systems and would be speedily implemented.

Mr Legkoro was pleased with the progress on gender issues, but was concerned about the disability component of the staff.

Dr S Mngadi, Senior Manager, DPLG replied that there was not much mention of disability because the unit was understaffed last year. When it was enhanced, earlier in this year, it had undertaken research and conducted a workshop on the national integrated disability strategy, including many people from the focal points and municipalities.

Mr Legkoro noted that the disaster area enjoyed a large allocation and wondered how it fitted into the bigger picture in order to justify that allocation.

Mr Nonkonyana noted that in terms of the Act there should be about 20% of traditional leaders in the municipal councils. He asked if the input on the single public service legislation included traditional leaders, and if the current budget catered for capacity building of new institutions such as traditional councils.

Mr Doman asked if there was progress on the Councillor remuneration issues and if the municipalities understood what was going on.

Ms Makotoko replied that the Councillor remuneration was an achievement. There had been an overhaul of the system and this was an improvement. DPLG continued to refine the process. In regard to the municipal councils, she noted that issues had been raised. Without wishing to deny the importance of the issues, there were questions of misinterpretation and there were also cost issues involved.

The Chairperson asked when the DPLG was going to have a look at the substantive work around local government equity.

Dr Mngadi replied that it was heartening that the Committee was as interested in the issues of gender and equity as the department itself. She added that DPLG was doing much developmental work and was currently collaborating with the National Youth Service- run programmes such as Proud to Serve Campaigns that targeted unemployed youth to get them to develop their own skills. She added on the gender issue DPLG were not concerned only with numbers but also positions, skills and the environment.
The HIV framework was supposed to provide guidelines to municipalities as to how they could incorporate issues of HIV and AIDS into their strategies and plans, as well as to give an indication how they could garner support from other departments, respond internally on prevention, care and support, and work effectively with NGOs.

Briefing by Disaster Management Branch
Mr Lance Williams, Executive Manager, Disaster Management Branch, tabled but did not discuss the purpose of the branch and its core functions. The achievements were also tabled, but he highlighted the main focus areas. There had been a successful Eastern Cape pilot project and successful implementation of the working on fire programme, which was a joint venture with Department of Water Affairs and Forestry. A possible expansion of the programme would develop an early warning system for the outbreak of fires.

Mr Williams reported that in those provinces without fire programmes aircraft were used from the National Defence Force and Air Force, but these were hired at commercial rates. Technical aspects of disaster management took up the most resources. He noted in particular that there was now a system established that allowed for response from the disaster management centre. Disaster satellite imagery was important and the provinces had free access to it. .

Slide 6 he specially wanted to mention that there was a system that allowed the provinces to capture live disaster incident with a view to get a response from the disaster management center. The other item was item (m) on disaster satellite imagery which they thought was very important to the country. The provinces had access to their satellite imagery for free.

The budget for the 2007/08 year was R47 million, ans the allocations reflected an average annual real growth of 15.3%. The growth was due to acquiring technology such as the satellite imagery and helicopter services. Four positions had been advertised and were in the process of interview, so there was work on the capacity. The branch generally had to train people. There would be a substantial increase in the allocations from 2007 to 2010. Interaction with NT had paid off, and R10 million had been set aside for disaster support from next year, rising to R25 million by 2010. It was hoped that this would be put into early warning systems. The branch was happy that it could effectively manage the budget.The greatest challenge for 2010 was the creation of the contingency guidelines. The Branch would like to do more in the fire brigade services. The Branch's key role was with its stakeholders and it had prioritized their SADC commitments.

Discussion
The Chairperson asked about the use of the indigenous knowledge system, as this also meant public participation

Mr Williams replied that DPLG was looking into tying this with the technology they were already utilising.

Mr Kekana remarked that he was surprised that disasters included drought. He asked what services the Department provided when there was drought.

Mr Williams replied that if the branch received a request for drought relief, they would solicit funding and would then be able to provide water tankers, which were costly. They also looked at alternative water sources and how the water should be managed more effectively.

Mr Legkogoro remarked that he understood the cost of the airforce craft but he wanted to know if DPLG had made substantial efforts to make the arrangements workable, as it did not make sense for the State to hire private equipment because national Defence force assets were unreachable.

Mr Williams replied that DPLG had approached the NT and did try to manage the situation. They understood that the military needed to optimally utilise their resources for commitments of their own. However, there was nothing that DPLG could do, which was why it had approached NT.

Mr Smith asked how the branch managed to sustain itself, and asked, if there was a rollover, whether the Department would require the permission of NT to use that for an early warning system.

Mr Williams replied that there was a need to have a general public awareness programme. The new budget would allow for this, and other areas were being targeted for improvement, but this was difficult.

The Chairperson remarked that DPLG should not have to get permission for an early warning system, which should simply be installed. He asked if early warnings were already being used and if there had been any assessment of the effectiveness of the system.

A number of questions could not be answered due to time constraints, and it was agreed that Mr Sigidi's presentation on Free Basic Services and Infrastructure, and further questions to the Department, would be postponed to another day.

The meeting adjourned.