S Mufumadi: Provincial and Local Government Dept Budget Vote
2006/07

24 May 2006

Madam Speaker,
Local Government MECs,
Traditional leaders of our people,
Mayors and councillors present in the gallery,
Honourable members:

Introduction

This budget vote comes before the House a little over two months after the
local government elections which took place on 1 March 2006. Our people’s
participation in those elections was premised on the legitimate expectation
that it would help hasten the dawn of a new age, an age characterised by:
* the end of the use of the abominable bucket system as a means of
sanitation
* universal access to clean water, decent sanitation and electricity as well
as
* the existence of economic and social infrastructure which is of a quantity
and condition that guarantees sustainable economic development and social
provisioning.

Indeed, together with our people we understood that critical to the
realisation of these objectives is a plan to make our municipal system of
government work better.

Diagnostic Study

As honourable members are aware, in 2004 we carried out a Diagnostic Study
of the local government sphere. This was subsequently followed by a
comprehensive qualitative assessment which was done in 2005. These undertakings
brought to light two deficiencies which are desperately in need of urgent
attention.

The first is the challenge of weak institutional capacity and the second is
the problem of inadequate systems of accountability. National and provincial
governments have gained an even much better feel of the situation as we
interacted through the Presidential and Ministerial Izimbizo Programme of 2005,
with 106 municipalities across all the nine provinces.

Project Consolidate

Madam Speaker, steps were taken to ensure that none of our municipalities
remain stuck in the unpromising corner where poor performance and the attendant
problem of service delivery backlogs are the order of the day. A hands-on
programme of support known as Project Consolidate was rolled out. As at April
2006, a total of 112 experts, 18 graduates and 80 engineering students had been
mobilised and deployed in a total of 69 Project Consolidate municipalities. The
scale of coverage of the deployment by municipal type spanned 52 local
municipalities and 17 district municipalities. I will be remiss if I do not
pause here to thank the following partners for a heart warming demonstration of
solidarity, the Department of Water Affairs and Forestry, the local government
Sector Education and Training Authority (SETA), the Engineering Council of
South Africa (ECSA), the Afrikaanse Handelsinstituut, National Treasury, the
South African Black Technical Careers Organisation, the South African
Association of Civil Engineers, Department for International Development (UK)
and the Institute of Municipal Finance Officers.

Through the support of service delivery facilitators who came from these
organisations, Project Consolidate proved to be a milestone development
representing an important material sign of what could be achieved through a
co-operative system of governance. Various municipalities can now point to the
positive ways in which the lives of their residents were touched by the
interventions of the service delivery facilitators (SDFs):

* The Greater Kokstad Municipal Council, assisted by deployed SDFs, was able
to electrify 556 households and it remains on course to complete the
electrification of 1 000 households in the horseshoe informal settlement. The
settlement is in the process of being converted into a formal residential
area.

* Whereas the payment level for services rendered to the community of JS
Moroka stood at 11 percent as at July 2005, SDF intervention helped the
municipality to target major debtors and by January 2006 the payment level had
increased to 45 percent. Similarly, in the municipality of Matjhabeng the
payment level increased from 51 percent in July 2005 to 62 percent by February
2006.

These and other examples too numerous to mention serve to underscore the
point that Project Consolidate is a prelude to the ushering-in of a season in
which we shall have a local government system which has the requisite capacity
to discharge its mandate.

Madam Speaker and honourable members, it is our intention to scale up and
mainstream the hands-on support that we are currently providing to targeted
municipalities. Within this context of intensified support for local
government, priority attention shall be paid to former cross boundary
municipalities as well as to the urban and rural nodal municipalities.

As we continue to organise Presidential and Ministerial Izimbizo, follow up
actions shall be undertaken in order to ensure that our entire system of
government is indeed seen to be responsive to the priority needs of the people.
This explains why we are continuing to mobilise our country’s knowledge base
and to harness it to the task of improving the functional effectiveness of our
governance system. As we speak the Development Bank of Southern Africa (DBSA)
through an initiative called Siyenza Manje, is in the process of recruiting 144
experts and 30 young graduates for deployment to priority municipalities over
the next three years. A number of 90 experts and graduates will be placed in
the priority municipalities by December 2006. These experts will provide
support in the areas of engineering, project management, financial management
and town planning.

The Department of Provincial and Local Government (DPLG) and the Department
of Public Service and Administration (DPSA) are also finalising the
conceptualisation of a contribution to be made by Project Khaedu towards
enhancing national and provincial governments’ support for priority
municipalities.

I must hasten to point out that welcome as this assistance is it however
carries strong risks of deepening the pathology of local government reliance on
exogenous sources of growth and development.

In order to forestall this ghastly prospect, we are taking steps to help
strengthen the political strategic capacity of the municipalities themselves.
In addition to the councillor induction programme directed at the over 9 000
newly elected councillors, we are also looking at the technical side of local
government’s functional status. In two days time (i.e. on 26 May 2006) the
Department of Public and Local Government (DPLG) will publish municipal
performance management regulations for public comment. This will enable us to
finalise and issue generic pro forma performance contracts. This will place
municipalities in a position to have performance agreements and contracts with
senior managers that are linked to the political mandate of elected
representatives. Ultimately this initiative will help us put in place one of
the crucial elements of sustainability.

Strengthening the financial resource base

The deployment of professionals to targeted municipalities will be
complemented by a range of parallel interventions aimed at augmenting the
fiscal resource base of municipalities. Is for this reason that out of the
R82,9 billion allocated to municipalities over the next three years, the
Regional Services Council (RSC) levy replacement provision to the tune of R24
billion has been made. This replacement provision will compensate district and
metropolitan municipalities for lost revenue as a result of the abolition of
the RSC levies which comes into effect from 1 July 2006.

An additional component to the Local Government Equitable Share (LGES) for
2006/07 relates to the new framework for the remuneration of councillors. This
effectively means that subsidized funding is being made available from the
national fiscus.

An amount of R584 million will be transferred to support councillor
remuneration over the Medium Term Expenditure Framework (MTEF) period.
Furthermore, additional funding to the amount of R550 million will be made
available to district municipalities in order to assist them to carry out the
municipal health service functions.

The Municipal Property Rates Act will be implemented in a phased manner. By
the end of 2005 at least 17 municipalities considered themselves ready to
comply with the requirement of implementing the Act from 1 July 2006. We are
currently finalising the crafting of the relevant regulations and these will
soon be gazetted. The implementation of the Act will immensely strengthen the
financial and resource base of our municipalities.

Infrastructure investment

One of our strategic areas of focus in the next five years will be to
improve our capacity to plan, manage and monitor infrastructure investment and
the provision of municipal services. In 2005/06, government set aside R5,4
billion for the Municipal Infrastructure Grant (MIG). By the end of March 2006
the entire amount had been transferred to municipalities but actual expenditure
stood at R3,9 billion. In other words the rate of spending on municipal
infrastructure already stands at 72 percent.

Increased spending levels in this regard had enabled us by the end of
December 2005 to provide 179 000 households with access to sanitation and to
provide to over 412 000 households, access to potable water.

Even with respect to MIG expenditure, our approach to monitoring is one
which conceives of progress as an outcome of joint efforts. It is a partnership
which transcends the ‘monitor’ and the ‘monitored’ distinction. It is only in
this way that we have been able to get better insights into the impediments
which impair the capacity of municipalities to effectively manage projects.

We are now better placed to manage blockages in the MIG projects
registration process, strengthen existing and establish additional Project
Management Units (PMUs) in municipalities and to develop national
infrastructure master sector plans to guide infrastructure planning and
implementation at local level. We are therefore confident that the R21,4
billion allocated to MIG over the next three years will yield an optimal
return.

IDP engagement process

Madam Speaker, whereas the Integrated Development Plans (IDPs) of
municipalities were originally conceived of as strategic plans specific to the
municipalities concerned, we have come to regard the IDP as a potential fulcrum
for raising issues to be attended to by all the three spheres of government.
Clearly therefore, all the three stages of the IDP process starting from
conceptualisation through to formulation and ultimately to execution require
joint and co-ordinated inputs.

We are happy to report that by March 2006, 80 percent of all municipalities
in the country had draft IDPs which benefited from intergovernmental
collaboration and support.

We are on course to ensure that by the end of June 2006, national and
provincial government will have convened intensive interactive sessions in each
province in order to assess the quality of every single draft IDP in the
country. This means that for the first time in the history of our country by
July 2006 we shall see a generation of municipal development plans that is
reflective of all the key priorities of national, provincial and local
government. It is through this process that we are beginning to forge a better
alignment between the National Spatial Development Perspective (NSDP), the
Provincial Growth and Development Strategies (PGDS) and the municipal IDPs.

Implementation of the IGR legislation

In addition to institutionalising government’s commitment to discharge its
obligations to the people via IDPs, attention shall also be paid to the task of
strengthening the intergovernmental co-ordination and implementation mechanism.
In this regard the efficient operation of our intergovernmental relations
system is essential for sustainable development and service provision.

At national level, the President’s Co-ordinating Council (PCC) is fully
operational and all provinces have established province wide intergovernmental
structures as set out in the legislation. The process of establishing district
intergovernmental structures is also continuing apace throughout all 46
district municipalities in the country. Within the next three months we will
finalise a Practitioners’ Guide on intergovernmental relations. This will be an
important resource for practitioners across our three spheres of government. It
will go a long way towards forging complementarities regarding resources and
capabilities of each sphere of government.

Partnerships

Madam Speaker, continuing attention is also being paid to the task of
strengthening ward committees. These ward committees represent a new
relationship between civil society and the re-articulated South African State.
Participation in these coupled with the invaluable contribution of Community
Development Workers (CDWs) gives civil society the possibility to influence the
direction of State practice in a manner that changes the lives of our people
for the better.

Through the 2005 Imbizo Programme, we had a more structured interaction with
ward committee members. We have since launched a handbook for ward committees
and the Ward Committee Resource Book. This was done on 10 February 2006. In
addition to this we are working on a national framework on public participation
in local government and we are also finalising a submission to the South
African Qualifications Authority (SAQA) for an accredited training course for
ward committees.

We are also determined to ensure that all the necessary development oriented
partnerships are forged especially at local level. To that end Growth and
Development Summits will be convened in all metropolitan and district
municipalities. These summits will provide the opportunity to further confirm
and refine the priorities identified in the IDPs. They will also help
facilitate the process of stakeholder mobilisation.

Conclusion

Madam Speaker, we have set our sights firmly on the goal of ensuring that
come the end of local government’s current term our people’s best hope for a
better life shall not be disappointed. Success in this regard will depend
especially on the skilful performance of our duties as public representatives
in the legislative bodies and executive structures of the state at national,
provincial and local level. I want to assure this House that we in the Ministry
and Department of Provincial and Local Government are determined to work
untiringly for the realisation of this goal. With your co-operation success is
certain.

I thank you!

Issued by: Department of Provincial and Local Government
24 May 2006
Source: Department of Provincial and Local Government (http://www.dplg.gov.za)