ATC150505: Report of the Portfolio Committee on Cooperative Governance and Traditional Affairs on the Annual Performance Plan and Budget Vote 4 of the Department of Cooperative Governance and Traditional Affairs Dated 05 May 2015

Cooperative Governance and Traditional Affairs

REPORT OF THE PORTFOLIO COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS ON THE ANNUAL PERFORMANCE PLAN AND BUDGET VOTE 4 OF THE DEPARTMENT OF COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS DATED 05 MAY 2015

 

The Portfolio Committee on Cooperative Governance and Traditional Affairs (the Committee, having met with the Department of Cooperative Governance and Traditional Affairs on their five year Strategic Plan, Annual Performance Plans (APP) and Budget for 2015/16 financial year, reports as follows:

 

1. INTRODUCTION

 

In terms of section 55(2) of the Constitution of the Republic of South Africa, Act 108 of 1996, National Assembly must provide for mechanisms (a) to ensure that all executive organs of state in the national sphere of government are accountable to it; and (b) to maintain oversight of (i) the exercise of national executive authority including the implementation of legislation; and (ii) any organ of state. In terms of the Public Finance Management Act, 1999, the Accounting Officers must provide Parliament or the relevant Legislature with their respective institution’s medium-term strategic plan and where applicable with its annual performance plan.

 

The Money Bills Amendment Procedure and Related Matters Act, vests powers in Parliament to reject or recommend budgets of departments. The Act further makes provision for the implementation of recommendations emanating from the Committee oversight.

 

The Committee exercises its mandate of oversight in line with the above-mentioned legislative framework over the Department of Cooperative Governance and Traditional Affairs (CoGTA) and its entities, namely the Municipal Demarcation Board (MDB), the Commission for the Promotion and the Commission for the Protection of the Rights of Cultural, Religious and Linguistic Communities (CRL Rights Commission), the South African Local Government Association (SALGA) and the National House of Traditional Leaders (NHTL). The Committee met with the Department of (CoGTA) on 03 February 2015 to receive a briefing on the Strategic and Annual Performance Plans and Budget. The Committee met with SALGA on the 10th of March 2015 to receive a briefing on their Strategic Plan, Annual Performance Plan and the Budget. The Committee also met with the CRL Rights Commission on 17 March 2015 to receive a briefing on their Five year Strategic Plan, APP and budget. The Committee is also scheduled to meet with the MDB for a briefing on the same issues.

   

1. OVERVIEW OF POLICY PRIORITIES FOR 2014/15

 

A key highlight of the 2014/15 financial year for the department of Cooperative Governance and Traditional Affairs was the introduction of the ‘back to basics’ programme following the appointment of former Finance Minister Pravin Gordhan as the Minister of the Department of Cooperative Governance and Traditional Affairs. The programme was formally adopted at the Presidential Local Government Summit held on 18 September 2014. ‘Back to basics’ is the minister’s plan to use administrative reform to rehabilitate municipal governance. The plan entails ‘creating an environment in which rules could be enforced, especially the ones designed to ensure the right people were appointed to run systems and implement policy. It unfolds in the context of the National Development Plan (NDP), which states that ‘meeting our transformation agenda for local government now requires a much higher and more focused intergovernmental commitment towards the creation of more functional municipalities. The ‘back to basics’ approach also gives expression to President Jacob Zuma’s pronouncements during the first State of the Nation Address of the Fifth Democratic Parliament, where he notes that ‘government would like people’s experience of local government to be a pleasant one’ and that ‘government has formulated a plan of action to revitalise local government.

 

The minister was appointed during the second quarter of the 2014/15 financial year and has spent most of this time diagnosing what local government was doing well and not so well. The diagnosis, which involved a desktop study as well as visits to provinces and municipalities, enabled the Department to identify good governance, financial management, public participation and building institutional capacity as criteria for key performance areas. It also enabled the minister to categorise municipalities into three performance tracks: high, middle and low. At the top track are those municipalities that have got the basics right and are performing functions at least adequately. The Department’s policy objective is to ensure that these stay in the top group. The middle track municipalities are to be offered enough support to become top performers with unqualified audits. Municipalities at the bottom end of the track pose the most serious challenge, and this is where the Department envisages to work to ensure that the basic mechanisms to perform functions are in place.

 

Another key policy priority for the Department in 2014/15 was the finalisation of the integrated urban development framework. This is also in line with the NDP, which emphasises that ‘realising the economic dividends of urban growth requires a new approach to providing infrastructure, housing and public transport services while overcoming the spatial divisions of apartheid.’ Under the stewardship of National Treasury, the Department - in collaboration with the Financial and Fiscal Commission, the Department of Planning, Monitoring and Evaluation and the South African Local Government Association - also completed the first phase of the review of the infrastructure grant system.

 

1. POLICY PRIORITIES FOR 2015/16

 

While minister Gordhan devoted much of 2014/15 to diagnosing the strengths and weaknesses in the local government system, the 2015/16 financial year will be characterised by implementation of reform – as emphasised in the Department’s Strategic Planning Session on 29-30 January 2015. The implementation of Back to Basics programme will be a key activity for the department. The programme is designed to ensure that all municipalities perform their basic responsibilities and functions without compromise.  The Programme is built on five pillars namely:

 

• Put people and their concerns first and ensure constant contact with communities through effective public participation platforms.
• Create conditions for decent living by consistently delivering municipal services to the right quality and standard. This includes planning for and delivery of infrastructure and amenities, maintenance and upkeep, including the requisite budgeting to do this and ensuring that there are no failures in services, and where they are, restore services with urgency.
• Be well governed and demonstrate good governance and administration, this includes cutting wastage, spending public funds prudently, hiring competent staff, and ensuring transparency and accountability.
• Ensure sound financial management and accounting, and prudently manage resources so as to deliver services sustainably and bring development to communities.
• Build and maintain sound institutional and administrative capabilities, administered and managed by dedicated and skilled personnel at all levels.

 

The other areas of implementation will entail, among other things, focusing on infrastructure audits, maintenance plans and expenditure, and transforming the urban space. One of the nine strategic national priorities for growth and development, which Cabinet has agreed to for the 2015/16 financial year, is infrastructure investment. Allocations for critical items such as infrastructure maintenance are expected to grow faster than inflation. As announced in the Budget Speech, ‘a new approach is proposed for cities, to support their growth and restructure and strengthen infrastructure investment.’ A conference on urban infrastructure investment is envisaged.

 

The Department will be giving expression to this infrastructure priority through the deployment of 20 municipal infrastructure grant specialists to provincial and district task teams. The review of local government infrastructure grants is expected to simplify and consolidate the financing arrangements. The first phase of the review, completed in 2014, identified two reforms that will be made in 2015/16. The first relates to the amendment of the rules in the infrastructure grant system to allow funds to be used to refurbish and replace existing infrastructure. The grant previously catered only for new infrastructure. The grant framework also clarifies that funds can be used to upgrade informal settlements. The other reform concerns a reduction in the number of grants in order to ease the burden of grant reporting. In the Budget Speech it was also noted that national government is working with metropolitan municipalities to invigorate urban development. In this regard, Budget 2015 ‘begins a process of realigning public expenditure to support spatial restructuring in urban areas.’

 

1. STRATEGIC AREAS OF FOCUS OF THE DEPARTMENT

 

The following are the strategic areas of focus of the Department:

 

• Increase public confidence in local government. The back to basics programme aims to give all South Africans a basic set of tools by which they can hold their municipalities to account and measure whether they are living up to their promises.
• Create a functional local government system based on accountability for performance. Clear standards for performance will be set, performance against those standards will be monitored.
• Ensure significant improvements in service delivery through sound infrastructure management
• Build institutional resilience and initiate the next phase of institution building.
• Lead and support the creation of prosperous cities and towns by restructuring the space economy
• Strengthening intergovernmental arrangements for delivery of services, collaborative planning, and oversight within the system of cooperative governance
• Entrench a culture of good governance and instil a new morality of service and integrity in local government.
• Stimulate local economic development and expand local public employment programmes

 

1. BUDGET ANALYSIS

 

Budget Vote 4 seeks to improve cooperative governance across the three spheres of government in partnership with institutions of traditional leadership, and in the process ensure that provinces and municipalities carry out service delivery and development functions effectively. The total estimated vote expenditure for 2015/16 amounts to R69.3 billion – up from R63.4 billion in 2014/15. The Department will focus over the medium term on the implementation of the Back to Basics action plan. Back to Basics aims to ensure that all municipalities in the country perform their basic responsibilities and functions. The plan’s building blocks include good governance, public participation infrastructure services and institutional capacity and financial management. The plan is aligned with the outcome 9 of government’s 2014-2019 medium term strategic framework (responsive, accountable and efficient local government)

 

The bulk of the department’s spending over the medium term is the Governance and Intergovernmental Relations programme, which transfers the equitable share to fund basic services, free basic services and the general operational costs of municipalities. The programme’s budget for the period is R158.9 billion. The department second largest spending programme is the municipal infrastructure grant which supports municipalities to deliver municipal infrastructure. The total allocation over the MTEF period is R46.9 billion. The third largest area for the department expenditure is the community work programme. The programme aims to tackle poverty and provide livelihood support for poor households by providing participants with a minimum number of regular days of work to supplement their existing livelihoods. The programme is allocated a budget of R9.7 billion. The community works programme has been negatively affected by the Cabinet approved budget reduction of R586 million over the medium term, but the impact will be minimised by the 19.7 per cent growth in the budget over the period

 

Table 1 below provides a comparison between the adjusted appropriation in 2014/15 and the estimated expenditure in 2015/16. As discussed in more detail under subsection 4.4, the most notable spending cut (28.3 per cent) is under the National Disaster Management Centre programme.

 

 

Table 1: Vote 4 in 2014/15 and 2015/16

Programme	Budget		Real Increase / Decrease in 2015/16	Real Percent change in 2015/16
R million	2014/15	2015/16
Programme 1: Administration	252.5	248.0	-  15.9	-6.28 per cent
Programme 2: Policy, Research and Knowledge Management	21.1	22.1	0.0	-0.06 per cent
Programme 3: Governance and Intergovernmental Relations	44 618.8	50 321.3	3 397.7	7.61 per cent
Programme 4: National Disaster Management Centre	807.8	606.8	-  228.8	-28.32 per cent
Programme 5: Provincial and Municipal Governance Systems	288.0	328.1	25.1	8.71 per cent
Programme 6: Infrastructure and Economic Development	17 349.8	17 668.4	-  490.6	-2.83 per cent
Programme 7:Traditional Affairs	115.9	119.4	-  2.0	-1.70 per cent

 

At the last reporting period (2013/14), underspending – calculated as the difference between appropriated and actual expenditure – amounted to R2.1 billion as a result of the withholding of the equitable share for unspent municipal infrastructure grant allocations during the previous financial years.

 

1. Programme 1: Administration

 

This programme is meant to provide strategic leadership, management and support services to the Department. Except for the Management sub-programme, all sub-programmes indicate a reduction in real terms compared to the previous financial year – as captured in Table 2 below. The most substantial decrease is seen in the Office of the Chief Operating Officer, which is set to receive 25.3 percent less compared to 2014/15. The Department will also be spending considerably less on communication and liaison, probably because the groundwork on the ‘back to basics’ programme has now been completed.

 

 

 

 

Table 2: Programme 1: Administration

Programme	Budget		Real Increase / Decrease in 2015/16	Real Percent change in 2015/16
R million	2014/15	2015/16
Sub-programme 1: Ministry	31.0	27.8	-  4.5	-14.43 per cent
Sub-programme 2: Management	20.1	21.1	0.0	0.17 per cent
Sub-programme 3: Chief Operating Officer	19.8	15.5	-  5.0	-25.30 per cent
Sub-programme 4: Corporate Services	82.3	84.8	-  1.4	-1.68 per cent
Sub-programme 5: Financial Services	29.0	30.3	-  0.1	-0.30 per cent
Sub-programme 6: Communication and Liaison	14.2	11.7	-  3.0	-21.38 per cent
Sub-programme 7:Legislation Review and Drafting	11.5	11.5	-  0.5	-4.58 per cent
Sub-programme 8:Internal Audit and Risk Management	10.6	9.9	-  1.2	-10.88 per cent
Sub-programme 9:Office Accommodation	34.0	35.6	0.0	-0.09 per cent

 

1. Programme 2: Policy, Research and Knowledge Management

 

The Policy, Research and Knowledge Management programme provides support services to the Department in the areas of research and knowledge management, policy formulation, monitoring and evaluation, information, communication and business technology. With only three sub-programmes – as Table 3 shows – this is the smallest programme in the Department both in terms of size and budget.

 

Table 3: Policy, Research and Knowledge Management

Programme	Budget		Real Increase / Decrease in 2015/16	Real Percent change in 2015/16
R million	2014/15	2015/16
Sub-programme 1: Management: Research and Policy	4.3	6.1	1.5	35.36 per cent
Sub-programme 2: Policy and Research Methods	7.1	5.6	-  1.8	-24.74 per cent
Sub-programme 3: Knowledge and Information Management	9.7	10.3	0.1	1.32 per cent
Total	21.1	22.00

 

1. Programme 3 : Governance and Intergovernmental Relations

 

As usual, the bulk of the Department’s spending over the medium term is concentrated on the Governance and Intergovernmental Relations programme. The programme ‘transfers the equitable share to fund basic services, free basic services and general operational costs of municipalities. The most notable shift in the programme’s budget allocation trend is, as indicated in Table 4, the 67.3 percent reduction in funding to the South African Local Government Association (SALGA). In fact, this is the last financial year that SALGA will be funded from the national fiscus. From 2016/17 onwards, the entity is expected to implement a self-sustaining funding model. Only sub-programmes 1 and 9 indicate a real increase (20.2 percent and 7.6 percent respectively) in estimated allocations for 2015/16.

 

Table 4: Programme 3: Governance and Intergovernmental Relations

Programme	Budget		Real Increase / Decrease in 2015/16	Real Percent change in 2015/16
R million	2014/15	2015/16
Sub-programme 1: Management: Governance and Intergovernmental Relations	16.5	20.8	3.3	20.29 per cent
Sub-programme 2: Intergovernmental Relations Coordination	9.9	9.6	-  0.7	-7.47 per cent
Sub-programme 3: Intergovernmental Fiscal Relations	13.1	10.8	-  2.8	-21.33 per cent
Sub-programme 4: Governance and Public Participation	6.3	5.3	-  1.2	-19.73 per cent
Sub-programme 5: South African Local Government Association	26.9	9.2	-  18.1	-67.37 per cent
Sub-programme 6: Municipal Demarcation Board	44.2	45.8	-  0.5	-1.13 per cent
Sub-programme 7:South Africa Cities Network	6.1	6.3	-  0.1	-1.45 per cent
Sub-programme 8:United Cites and Local Government of Africa	5.6	5.8	-  0.1	-1.17 per cent
Sub-programme 9:Local Government Equitable Share	44 490.1	50 207.7	3 418.0	7.68 per cent
Total	44618.7	50321.3

 

1. Programme 4: National Disaster Management Centre

 

The National Disaster Management Centre (NDMC) is meant to promote an integrated system of disaster risk management. Over the 2015 Medium Term Expenditure Framework period government has reprioritised, among other things, the repair of provincial and municipal infrastructure damaged by disasters in 2014 and 2015.This reprioritisation, as noted previously, has seen a 28.3 per cent reduction in the 2015/16 estimated allocation for the NDMC – the highest compared to all other programmes. The reduction is primarily related to sub-programme 5 where disaster relief transfers shrink by 38 percent.

 

 

Table 5: Programme 4: National Disaster Management Centre

Programme	Budget		Real Increase / Decrease in 2015/16	Real Percent change in 2015/16
R million	2014/15	2015/16
Sub-programme 1: Management: Head of Disaster	4.5	6.8	2.0	44.19 per cent
Sub-programme 2: Legislation, Policy and Compliance Management	6.1	5.6	-  0.8	-12.40 per cent
Sub-programme 3: Planning, Coordination and Support	13.8	12.9	-  1.5	-10.80 per cent
Sub-programme 4: Intelligence and Information Systems Management	26.0	25.9	-  1.3	-4.95 per cent
Sub-programme 5: Disaster Relief Transfers	561.0	364.3	-  213.4	-38.04 per cent
Sub-programme 6: Integrated Disaster Management Monitoring and Evaluation Systems	2.1	2.3	0.1	4.51 per cent
Sub-programme 7: Municipal Disaster Recovery Grant	194.3	188.9	-  14.1	-7.23 per cent
Total	807.8	606.7

 

1. Programme 5: Provincial and Municipal Governance Support

 

This programme provides oversight, support systems and regulatory mechanisms for provincial and municipal government and associated entities. The 2015/16 financial year sees the introduction of the Municipal Demarcation Transition Grant to assist those municipalities affected by the boundary re-determination process in preparation for the 2016 local government elections. Table 6 also shows significant reductions under sub-programmes 2 (27.7 percent) and this may be due to the fact that the Department has finalised the Interventions, Monitoring and Support Bill, which, among other things, seek to guide provinces on the process of intervening in municipalities in terms of Section 139 of the Constitution.

 

 

 

 

Table 6: Programme 5: Provincial and Municipal Governance Support

Programme	Budget		Real Increase / Decrease in 2015/16	Real Percent change in 2015/16
R million	2014/15	2015/16
Sub-programme 1: Management: Provincial and Local Government Support	7.7	8.0	-  0.1	-0.86 per cent
Sub-programme 2: Provincial Government Support and Intervention	6.6	5.0	-  1.8	-27.71 per cent
Sub-programme 3: Local Government Support and Intervention	13.2	16.2	2.3	17.11 per cent
Sub-programme 4: Development Planning	8.4	8.5	-  0.3	-3.44 per cent
Sub-programme 5: Municipal Systems Improvement Grant	252.2	251.4	-  12.3	-4.88 per cent
Sub-programme 6: Municipal Demarcation Transition Grant	0.0	39.0
Total	288.1	328.1

 

1. Programme 6: Infrastructure and Economic Development

 

The Infrastructure and Economic Development programme is the Department’s second largest spending programme, after the Governance and Intergovernmental Relations programme. It is meant to support provincial and local government programmes and systems that promote economic and infrastructure development. While the fiscal space is closing, in line with the cost-cutting objectives of government’s 2014 – 2019 Medium Term Strategic Framework, key infrastructure spending continues to grow in real terms. As seen in Table 7 below, the bulk of expenditure in this programme is in sub-programmes 4 and 5, the Municipal Infrastructure Grant and the Community Work Programme, respectively.

Programme	Budget		Real Increase / Decrease in 2015/16	Real Percent change in 2015/16
R million	2014/15	2015/16
Sub-programme 1: Management: Infrastructure	13.2	13.8	0.0	-0.24 per cent
Sub-programme 2: Local Economic Development Planning	9.0	8.5	-  0.9	-9.88 per cent
Sub-programme 3: Infrastructure Development	11.6	10.4	-  1.7	-14.45 per cent
Sub-programme 4: Municipal Infrastructure Grant	14 764.0	14 955.8	-  493.2	-3.34 per cent
Sub-programme 5: Community Work Programme	2 257.8	2 375.9	9.3	0.41 per cent
Total	17 349.8	17668.4

 

Table 7: Programme 6: Infrastructure and Economic Development

 

Cabinet has approved a reduction of R481 million to the municipal infrastructure grant over the medium term. In 2015/16 this amounts to R142.3 million. However total allocations still increase to R14.9 billion in 2015/16, but when taking inflation into account this represents a real decrease of 3.3 percent. Overall municipal grant expenditure was 90.6 percent in 2013/14 compared to 82.2 percent in 2012/13. This is a noticeable improvement. The CWP on the other hand gives expression to the NDP’s goal of broadening work opportunities through community based employment schemes. Over the medium term, the CWP sub-programme will also be subject to R586 million in Cabinet approved reductions. However, for 2015/16 allocation to the CWP is set to increase by 0.4 percent.

 

1. Programme 7: Traditional Affairs

 

Though reflected as a programme within Budget Vote 4, Traditional Affairs is a separate but smaller Department with 3 programmes and sub-programmes.

 

Table 8: Department of Traditional Affairs

Programme	Budget		Real Increase / Decrease in 2015/16	Real Percent change in 2015/16
R million	2014/15	2015/16
Programme 1: Administration	17.5	22.5	4.0	22.68 per cent
Programme 2: Policy, Research and Legislation	13.9	14.6	0.0	0.23 per cent
Programme 3: Institutional Support and Coordination	80.4	82.4	-  1.8	-2.21 per cent
Total	111.8	119.5

 

1. Programme 1: Administration

 

This programme provides strategic leadership, management and support services to the Department of Traditional Affairs (DTA). It comprises four sub-programmes, as tabulated below. The most notable funding shift is the 222.9 percent increase in the estimated allocation for the Internal Audit, as indicated in Table 9 below. As seen in Table 2, the estimated allocation for the Department of Cooperative Governance’s (DeCoG) Internal Audit and Risk Management sub-programmes decreases by 10.8 percent. The sharp increase in sub-programme 4 may therefore indicate a shift of funds from DeCoG to the DTA.

 

 

 

 

 

 

Table 9: Programme 1: Administration

Programme	Budget		Real Increase / Decrease in 2015/16	Real Percent change in 2015/16
R million	2014/15	2015/16
Sub-programme 1: Ministry	4.0	4.0	-  0.2	-4.58 per cent
Sub-programme 2: Management of Traditional Affairs	9.7	7.0	-  3.0	-31.14 per cent
Sub-programme 3: Corporate Services	6.5	7.0	0.2	2.76 per cent
Sub-programme 4: Internal Audit	1.3	4.4	2.9	222.96 per cent
Total	21.5	22.4

 

 

1. Programme 2: Research, Policy and Legislation

 

Table 10: Programme 2: Research, Policy and Legislation

Programme	Budget		Real Increase / Decrease in 2015/16	Real Percent change in 2015/16
R million	2014/15	2015/16
Sub-programme 1: Management	3.3	3.5	0.0	1.20 per cent
Sub-programme 2: Policy and Legislation	3.3	3.6	0.1	4.09 per cent
Sub-programme 3: Research and Information Management	7.2	7.5	0.0	-0.60 per cent
Total	13.8	14.6

 

 

 

 

 

 

 

 

 

1. Programme 3: Institutional Support and Coordination

 

Table 11: Programme 3: Institutional Support and Coordination

Programme	Budget		Real Increase / Decrease in 2015/16	Real Percent change in 2015/16
R million	2014/15	2015/16
Sub-programme 1: Management	2.0	2.3	0.2	9.73 per cent
Sub-programme 2: Institutional Building and Capacity Development	6.0	6.3	0.0	0.19 per cent
Sub-programme 3: Intergovernmental Relations and Partnerships	6.1	6.8	0.4	6.37 per cent
Sub-programme 4: National House of Traditional Leaders	18.6	16.6	-  2.8	-14.84 per cent
Sub-programme 5: Commission for the Promotion and Protection of the Rights of Linguistic, Religious and Cultural Communities	35.0	36.6	-  0.1	-0.22 per cent
Sub-programme 6: Commission on Traditional Leadership Disputes and Claims	12.7	13.8	0.5	3.68 per cent
Total	80.4	82.4

 

 

 

1. The Department’s Contribution to the National Development Plan (NDP)

 

The NDP recognises the importance of a responsive, accountable and efficient local government system, as a building block towards the realization of a capable and developmental state. It proposes to move intergovernmental relations forward through improving clarity in a differentiated system – regionalising services where there are capacity constraints. A more coherent set of powers for metropolitan municipalities should be provided.

 

1. The Department’s Contribution to the Medium Term Strategic Framework (MTSF) 2014- 2019

 

The Medium Term Strategic Framework (MTSF) outlines work that will be done to implement the NDP over a five year period. The sub-outcomes spread across the different chapters of the NDP that are particularly important towards improving local government performance, ensuring quality service delivery and ultimately putting the local government sector on a positive path to achieving the vision. The MTSF Sub-outcomes:

 

• Members of society have sustainable and reliable access to basic services
• Intergovernmental and Democratic governance arrangements for a functional system of cooperative governance and participatory democracy strengthened’
• Sound financial and administrative management
• Promotion of social and economic development
• Local public employment programmes expanded through the Community Works Programme

 

1. Key Elements for the Department from State of the Nation Address 2015

 

The key directives from the State of the Nation Address in February 2015 outlined some initiatives that have implications for the Department and specifically the local government sector. They include the following:

 

• The continued implementation of the back to basics approach focusing on revitalising local government and fighting corruption.
• Response to rapid urbanisation.
• Acceleration of the Community Work Programme (CWP) to reach the targeted 1 million work opportunities by 2019.
• Continued dedicated support to mining towns and identified local and district municipalities in as far as water, sanitation and electricity are concerned.

 

1. COMMITTEE OBSERVATIONS

 

• The presentation by the Department was appreciated and interrogated by Members of the Committee. The Minister indicated that there is a need for additional regular engagement on some of the issues emanating from the Department’s presentation. The Minister indicated that he needs to brief the Committee on the number of financially unviable municipalities as per the back to basics categorization of municipalities as well as on the role of the Inter-Ministerial Task Team on Service delivery.
• The Committee noted that illegal land invasion in municipalities must not be left unattended. It was indicated that the law must be enforced to ensure that the invasion of both municipal and private land does not continue unattended.
• The Committee further noted with concern that the Department is introducing the Local Government Skills development Institute (Local Government Learning Centre) and whether this will not constitute duplication given the number of other role players involved in training of Councillors and officials.
• The Committee further noted that the Department has asked all Municipalities to forward all forensic reports that have been commissioned by municipalities. The Committee will engage further with the department once all the reports are submitted in order to ensure that recommendations contained in the reports are implemented as part of government’s anti-corruption drive.
• The Committee noted that revenue collection in rural municipalities is a challenge and needs to be addressed.
• The Committee further noted that the implementation of section 139 interventions in local government is inconsistent and that there is a need for legislation to regulate interventions in municipalities. The Committee notes the introduction of the Intergovernmental Monitoring Support and Interventions Bill and looks forward to robust engagements with stakeholders in local government on the bill.
• The Committee also noted that section 32 of the Supply Chain Management Policy needs to be reviewed as it was being misused in some municipalities.
• It was also noted that some municipalities are still appointing personnel who do not have the necessary qualifications as specified in the relevant Regulations.
• The Committee encouraged municipalities to utilise the existing legal instruments to collect the outstanding debt owed to municipalities. In this regard the Committee is of the view that the current legal instruments be reviewed and strengthened to give municipalities more powers to collect outstanding debt from defaulting consumers.
• The payment of debt collectors by municipalities to collect outstanding debts was another area of concern. It was felt that fees for the collection of outstanding debt, by debt collectors are not properly regulated.
• The Committee also agreed to debate the possibility of municipalities to ring-fence their electricity revenue for payment of debt owed to Eskom and for maintenance and upgrading of electricity infrastructure.
• The Committee noted that the participation and involvement of the Institution of Traditional Leadership on issues of development needs to be enhanced and their relationship with municipal councils strengthened.
• Finally, the Committee noted and welcomed the envisaged review of local government infrastructure grants, particularly the amendment of the rules in the infrastructure grant system to allow funds to be used to refurbish and replace existing infrastructure and to upgrade informal settlements.

 

1. RECOMMENDATIONS

 

• The Department should report to the Committee on a regular basis on the monitoring of the implementation of Back to Basics programme by municipalities. It should especially put emphasis on ensuring better municipal financial management including expenditure management and supply chain management.
• The Department should coordinate capacity building initiatives in Local government through its newly established Local Government Skills Development Institute with SALGA, Local Government SETA and various tertiary institutions.
• There should be closer cooperation between the Department and Departments of Human Settlements, Small Business, Water and Sanitation, Environmental Affairs, Economic Development, and Mineral Resources on the revitalization of mining towns.
• There should be joint initiatives between various sector departments (Water and Sanitation, Human Settlements, Energy) on the delivery of basic services.
• The Department should assist struggling municipalities to address challenges of outstanding consumer debts as well as debt owed to municipalities by government departments.

 

The Committee is satisfied with the Strategic Plan 2015-2019 and Annual Performance Plans for 2015-2016 of the Department of Cooperative Governance and Traditional Affairs, SALGA, CRL Rights Commission and MDB and accordingly supports its implementation.

 

The Committee recommends that the 2015-2016 budget allocation of the Department of Cooperative Governance and Traditional Affairs and its entities be approved.

 

The Democratic Alliance (DA) and the Economic Freedom Fighters (EFF) did not support the report.

 

Report to be considered.