PRESENTATION TO THE PRESENTATION TO THE SELECT COMMITTEE ON SELECT COMMITTEE ON

APPROPRIATIONSAPPROPRIATIONS

SUPPORT PROVIDED TO MUNICIPALITIESSUPPORT PROVIDED TO MUNICIPALITIES

28 January 2014Parliament, RSA, Cape Town

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PURPOSE: To brief the Select Committee on Appropriations on support provided to municipalities through –

1.The Local Government Turn Around Strategy (LGTAS)

2.Other interventions in support of the LGTAS and outcome 9

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INTRODUCTIONSince joining the Departments the Ministry has focused on:•An LGTAS report adopted by the G&A Cluster•Various engagements to ensure collaboration to address service delivery matters (such as sanitation through the extension of the inter-ministerial committee with DWA to DHS which has now allowed for NT to make necessary amendments to funding bulk infrastructure)•The resuscitation of the IGR structures

The LGTAS and other support programmes, following, need further focus within the remaining six months

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OUTLINE OF THE PRESENTATION 1. Local Government Turn Around Strategy (LGTAS) and

Outcome 9

a. Background

b. What has been achieved since 2009

c. Challenges identified

d. Recommendations to improve the system of LG

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OUTLINE OF THE PRESENTATION 2. Other interventions in support of the LGTAS and

outcome 9

a. National Capacity Building Strategyb. Municipal Infrastructure Support Agent (MISA)

Capacity Buildingc. Section 139 interventionsd. National Disaster Management Centre support

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1. Local Government Turn Around Strategy (LGTAS)

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a. Background: LGTAS

• A national LGTAS Implementation team constituted of national, provincial, SALGA teams was established.

• In December 2012, a process of assessing progress on the implementation of the LGTAS was initiated. Information was collected from municipalities and the provincial draft reports were developed.

• This report is therefore, a culmination of a series of consultations embarked upon, through the Ministerial Local Governance forums (MECs, Mayors, Municipal Councillors and Traditional Leaders) held in all provinces to solicit inputs and validate information contained in the reports. Inputs received from the consultations resulted in the finalisation of the provincial specific reports (attached as Annexures).

• The national composite report which details amongst others policy and legislative shifts, progress on the Key Performance Areas, challenges and proposals for the development of the Municipal Support and Intervention Plan (MSIP) 2014 – 2019 was developed. The MSIP will be aligned to the National Development Plan.

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b. What has been achieved since 2009? (LGTAS)

The State of Local government report, 2009, proposed a set of interventions that were meant to turn the situation of municipalities around. The high level analysis of the reports indicate pockets of progress in areas of policy shifts and legislative reviews as well as some aspects of the Key Performance Areas as follows:3.1. Policy Shifts developments – Differentiation Framework that focuses on : •Planning: Customised IDP framework and Urban Development Framework;•Financing: Review of the Local Government Equitable Share (LGES) formula to recognise the different capacities and revenue raising context of smaller rural municipalities and to consider the impact of urbanisation on urban municipalities; and •Support: MISA establishment, sector departments and Business-Adopt-a-municipality). Community Works Programme to create work opportunities as well as assisting municipalities e.g. Clean Cities

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What has been achieved since 2009? • Several pieces of legislation have also been reviewed and these are:

– MSA Amendment Act, 2011, leading to the development of the LG Regulations on the Appointment and Conditions of Employment for Senior Manager;

– The Municipal Property Rates Amendment Bill.– The Spatial Planning and Land Use Management (SPLUM) Act 16 of

2013• Pending legislation includes the following:

– The Draft Intergovernmental Monitoring, Support and Intervention Bill (IMSI);– Review of the Intergovernmental Relations Framework Act (2005);– Review of the Fire Brigade Services Act, 1987 and the development of a

National Fire Services Framework; and– Amendment of the Disaster Management Act, 2002.

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What has been achieved since 2009? Highlights on the Key Priority Areas (KPAs):

KPA 1: Accelerating Access to Basic Services •Census 2011, data indicates a significant increase in the provision of basic services in all provinces. • Some of the support provided by national sector departments includes:

– Dept of Energy providing more funding to reduce electricity backlogs in Gauteng, KZN and Eastern Cape and solar system connections to households.

– Dept of Human Settlements accrediting metros for the provision/acceleration of formal dwellings.

– Dept of Water Affairs with the building of dams for the provision of water e.g. De Hoop dam in Limpopo and capacitating municipalities on water security and harvesting.

– Dept of Environmental Affairs in partnership with COGTA on the “Clean Cities and Towns” campaign.

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What has been achieved since 2009?

Highlights: KPA 2: Promoting good governance •There is a general improvement in the filling of the Top Six Senior managers positions with Manager Positions at 86% and CFOs at 78% 217/278). The lowest being Development planners at 48%. The average vacancy rate for all positions is 28%. Efforts are made to ensure compliance with the Minimum Competency requirements. •Significant progress is realised in the establishment, induction and development of Ward Level Operational plans through the support provided by COGTA and provinces.•Municipal IQ has recorded a total number of 624 Community protests occurring between 2004-2012. Some of the reasons cited by communities range from poor service delivery, inadequate interaction and feedback from political leaders on progress made, dissatisfaction on the deployment of politicians, alleged corruption and nepotism. This indicates that not all community protests are service delivery related.

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What has been achieved since 2009? Highlights KPA 3: Enhancing sound financial management•Audit outcomes for the past 4 years indicates a slow uptake from 1 to 9 (3%) out of 278 municipalities receiving Clean Audit outcome for 2008/09 and 2011/12 financial year, respectively. A total of 61 (22%) municipalities have consistently received unqualified audit outcomes over the past 4 years (50% WC, 45% KZN and 41% Gauteng).•There is a significant reduction in the number of municipalities receiving disclaimers from 113 to 76 between 2008/09 and 2011/12 financial years.

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Audit OutcomeChanges in the number of

audits between 2008/09 to 2011/12

2011/12 2010/11 2009/10 2008/09

Clean Audit Improved by 8 9 3% 13 5% 6 2% 1 0%

Unqualified Regressed by 7 109 39% 115 41% 119 43% 116 42%

Qualified Regressed by 15 62 22% 52 18% 62 22% 47 17%

Disclaimer / Adverse

Improved by 37 76 27% 88 32% 86 31% 113 41%

Outstanding Regressed by 35 22 8% 10 4% 5 2% 1 0%

MIG support initiativesChallenge Initiative

Underspending on the MIG programme primarily as a result of lack of adequate planning or planning related challenges in Mpumalanga, Limpopo and Northern Cape. In certain instances lack of filling of Municipal Manager and critical section 56 manager posts as well as lack of timely communication and follow-up between municipalities and sector departments regarding submitted technical reports where there are issues that require compounded the planning challenge.

The DCoG in partnership with the Provincial Department of Local Government, MISA , DWA and Department of Public Works held intensive focussed advisory support sessions with each of the municipalities identified to which solutions to the challenges were provided

DCoG Support Programmes in Local Economic Development

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Programme Description Municipalities

Business Adopt A Municipality

The programme encourages the private sector, academic institutions, state owned enterprises, etc, to provide direct support to municipalities in areas aligned to LGTAS. Companies that have signed MoUs included Mercedez Benz, PG Bison, South African Breweries, Rand Water Foundation, Santam, Fort Hare, Eskom, etc. Support areas are currently in capacity building, disaster management and waste water treatment.

EC: Buffalo City, Nelson Mandela Metro, Elundini, Nkonkobe; WC: Eden DM; KZN: Ulundi; MP: Mbombela; LM: Thulamela; NW: Mafikeng (plus 18 other municipalities supported by Eskom)

Red Tape Reduction (with the dti & SALGA)

Promotes the creation an enabling environment for SMME development through the reduction of municipal processes and regulations that hinder business development. The intervention identifies red tape issues and capacitates municipalities to deal with them.

KZN: Umzimkulu, Kokstad; FS: Mogokare, Thabo Mofutsanyane; LP:Ephriam Mogale, Elias Motsoaledi; EC: OR Tambo, Amathole; NC: Sol Plaatjie, KharaHais.

Business Development Forums

The objective is to strengthen engagement and cooperation between government and business through the establishment of a platform or a structure between municipalities and the local private sector. The structure identifies catalytic economic development initiatives.

KZN: Umgungundlovu DM; MP: Steve Tshwete LM; WC: West Coast DM; EC: Cacadu DM; NW: Bojanala DM (Rustenburg); GP: Sedibeng DM

Capacity Building (funded by the dti)

Direct support provided to municipalities through mentorship and ongoing technical support. Municipalities assisted with economic profiling, economic planning and leadership and governance training.

MP: Nkomazi, Thembilise Hani; LP: Bela Bela; WC: Matzikamma ; George; Hessequa; NC: Francis Baard; FS: Kopanong; KZN: Umzimkulu

What has been achieved since 2009? Highlights: KPA 4: Fostering Sustainable Infrastructure Development and maintenance•Support to municipalities through MISA indicates that by end of March 2013 a total of 66 municipalities were supported for facilitating basic services infrastructure projects as well as in financial and administrative areas.•Community Works Programme (CWP) – by End of March 2013 the programme has managed to create a total of 186 363 work opportunities. Of these 58% are women and 54% are young people.

KPA 5: Intensifying the fight against corruption •Anti-corruption measures and training has been provided to both councillors and officials in municipalities across all provinces.•Partnerships have been entered into between COGTA, the HAWKS and SIU to form a Multi-Agency Working Group to focus mainly on local government investigations.

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c. Challenges identifiedSome of the challenges identified include the following:•Municipalities perceived the LGTAS as an unfunded mandate rather than a vehicle to assist them to preform better. As a result of this the MTASs were attached as annexures to the IDPs with no budgets; •Multiple reporting on the Service Delivery Budget and Implementation Plan (SDBIP), LGTAS, Outcome 9 and other sector specific reporting requirements.•Weak political and administrative oversight and monitoring and evaluating of the performance of municipalities; •Weak intergovernmental relations system resulting in uncoordinated support and to local government.•Lack of a central clearing house (single window of coordination) on the impact of sector legislation and policy development which leads to implementation challenges (inadequate resource allocation).

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d. Recommendations to improve the system of LG

• Improving the current system of development and implementation of policy and legislation for local government. For example the creation of a Regulatory Impact Assessment which will assess the impact of any devolution process assigned to local government by sector legislation. This mean that the Single Window of coordination and principles of co-operative governance should be revisited;

• Strengthen the current support provided to local government by across the three spheres of government, SALGA and other key stakeholders;

• Strengthen the capacity and capability of the three spheres of government for a more coordinated planning, especially for the implementation of the Spatial Planning and Land-Use Management Act, 2013;

• Provinces have strongly recommended that the SDBIP be used to report annual targets are reported quarterly. This will reduce the quadruple reporting currently taking place;

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Recommendations to improve the system of LG• A strong need to review, produce and embrace a county-wide municipal

performance reporting framework. The framework should provide a holistic picture of both financial and non-financial performance that is focused towards moving to the attainment of the outcomes of a developmental local government. This should be based on the established models, without unnecessarily increasing the reporting burden on local government;

• Reorganising the national, provincial departments responsible for local government to monitor, report and evaluate the performance of municipalities. This should lead to the development of an effective monitoring, reporting and evaluation system that will produce credible, quality and accurate reports that will be used to identify inefficiencies in municipalities; and

• Provide support to municipalities to enforce and institutionalise compliance for the submission of section 46,47 and 48 of the annual municipal performance reports by municipalities, provinces (MEC to national Minister) and national Minister to Parliament.

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2. Support provided beyond the LGTAS

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b. NCB Strategy for Local Government

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The following areas of the NB Strategy for Local Government, based on baseline skills audit findings per province, in district and local municipalities, are currently being implemented across all provinces:

SUPPORT through provincially-based workshops and guidelines:

•HR PractitionersImplementing SALGA’s HRM and D Strategy using the Regulations

as basis and developing and implementing Recruitment and Retention Strategies based on the toolkit developed and workshopped in 2012 / 2013

•IDP Practitioners Assisting practitioners with long term planning using the IDP

Framework while the Department of Social Development provides workshops on the use of population statistics in planning

NCB Strategy for Local Government

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NATIONAL TRAINING PROGRAMMES for local government will be developed and implemented, after verification of relevant Competence Profiles that will be used as basis for:

Induction Programme

Management Programme

Legal Services Programme

Administrative Services Programme

Functional Objectives1.Develop sector wide Technical capacity building for local government. 2.Provide funding for the development of municipal Built environment Technical skills3.Professionalize the local government officials in compliance with statutory provisions for Technical professions4.Facilitate lasting partnerships on Technical capacity building with public and private sector entities

c. MISA Capacity Building DivisionStrategic Goal

To strengthen municipal Technical capacity building for infrastructure delivery

• Water • Sanitation• Electricity (Energy)• Engineering (Electrical, Civil) • Construction • Roads• Town Planning• Waste Management• Mentoring & Professionalization of

Technical Officials

Core Focus Areas

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Province Artisans Development Programme

ElectricalSection 13Graduates

Electrical Officials

Section 28

PlumbersSection 13Graduates

PlumbersOfficials

Section 28

Diesel MechanicGraduatesSection 13

Diesel MechanicOfficials

Section 28

Water Process ControllersGraduates

Water Process Controllers

Officiald

Gauteng

Limpopo 25 1 15 2

Mpumalanga 37 6 12 5 2 6

KZN 69 14 7 4 16 5

Free State 25 8 2 2 6 6

Eastern Cape 8 17 4 4

Northern Cape 10 6 1 3 1North West 11 9 8 5 2

Western Cape 1 5 4

Total 186 54 60 7 16 3 27 23

Consolidated Current & Planned Deployments 2013/2014 FY

New deployments currently under way

d. SECTION 139 INTERVENTIONS: TYPES

In terms of section 139 (1) of the Constitution the provincial executive has the power to intervene into the local government affairs when a municipality cannot or does not fulfil an executive obligation in terms of the Constitution or legislation. The provincial executive may intervene by taking appropriate steps to ensure fulfilment of the obligation by doing the following: •Section 139(1) provides for general intervention in instances where a municipality fails to fulfil an executive obligation (this is a provincial discretionary intervention);•Section 139(4) provides for instances where a municipality fails to approve a budget or any revenue raising mechanism as required by legislation (a mandatory obligation); and•Section 139(5) provides for intervention in instances where a municipality, due to its financial affairs, is unable to deliver services or meet its obligation (a mandatory obligation).

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CURRENT S 139 INTERVENTIONS

Currently there are 13 municipalities in 4 provinces under administration in terms of S139 (10) and of S136 (3) (MFMA).

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Province (and No.) Municipalities

KwaZulu-Natal ( S139 (1) (b) - 4

S136 Financial Intervention (MFMA) - 3

Imbabazane LM, Indaka LM, Abaqulusi LM, Umvoti LM,

Ugu DM, Uthukela DM, Umzinyathi DM

Mpumalanga (2) Emalahleni LM, Bushbuckridge LM

North West (3) Matlosana LM (under request) , Ditsobotla LM, Maquassi Hills LM

Western Cape Oudtshoorn LM

NDMC support initiativesNDMC support initiatives

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Emergency Relief

Summary

•Municipal Disaster Grant ( MDG)Limpopo = R 87,661 million KwaZulu- Natal = R 34,124 million

•Provincial Disaster Grant (PDG)North West = R 43,630 million

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Post Disaster Reconstruction and Rehabilitation

Summary

1. Municipal Disaster Recovery Grant

Western Cape, Eastern Cape and Limpopo = R 118,340 million

2. Sector Grants 2010/2011 Disaster = R 1,124,600 billion 2011/12 &12/13 Disasters = R103,191 million

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In ConclusionIn Conclusion

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The DCoG and other key stakeholders are involved in many focused efforts in ensuring the improved coordination of support to local government and through an improved monitoring and evaluation system are making the necessary changes to processes that seem not to have the desired effect currently

THANK YOU.THANK YOU.

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