The Portfolio Committee reports as follows, dated 10 June 2003:

This House notes:

1. The Portfolio Committee on Provincial and Local Government undertook a major study tour of municipalities from 20 to 30 January 2003. Overall, the study tour covered 63 municipalities, 3 metro subcouncils, 7 MECs and provincial departments, 4 ward committee and public meetings, 3 urban and rural nodes, and 3 Planning and Implementation Centres. In all, the Committee interacted with over 2200 people.
2. On 15 April 2003 the Committee adopted a report on the study tour. The report was published in the ATC on 13 May 2003, and 5000 copies of a special printed version distributed to a wide range of stakeholders.
3. A debate on the report was held in the House on 27 May 2003, and the report was noted by the House.
4. The report contained several proposals for action which need to be adopted.

This House notes, further, the following observations in the report:

1. The core principles, values and features of the new local government system are sound. Essentially, the challenges are around implementation.
2. There is a need for greater understanding among councillors, officials, communities and other stakeholders on the need for and value of the two-tier system of district and local municipalities. However, the Democratic Alliance and African Christian Democratic Party believe that the two-tier system is fundamentally flawed and district municipalities should be phased out as soon as possible.
3. Significant improvements in service delivery and development will not be possible without greater co-ordination and co-operation across the three spheres of government. Provincial and national departments tend to ignore municipal IDPs in their plans, programmes, strategies and projects.
4. Financial issues constitute the biggest challenge confronting municipalities. Municipalities have to far more effectively and productively manage their funds, raise revenue, and deploy funds and other resources. Municipalities also have to do far more to collect arrears from those who can afford to pay, especially the private sector and government departments. It is clear, however, that there is a need for a new local government financial system that is appropriate to the new developmental model of local government.
5. Significant progress has been achieved in the provision of free basic services, especially water. It is vital, however, that a much higher proportion of people living in the rural areas, who are often those most in need, receive free basic water. Many municipalities feel that they will not be ready by 1 July to take over water projects and schemes currently being run by the Department of Water Affairs and Forestry. They have concerns about capacity, funds and the pressing need to address other challenges in the transformation. The provision of free basic electricity to be rolled out from 1 July 2003 nationally will also pose considerable challenges.
6. While the considerable potential of community participation in the new local government system is far from developed, there has been reasonable progress over the past two years. There is a need, however, to ensure greater and more consistent participation. Ward committees have a vital role to play in this regard. The legislation on ward committees did not cater for some of the huge wards that have since been demarcated, especially in the rural areas, some of which stretch for up to 70 kilometres.
7. The quality of leadership in a municipality, especially councillors, but also officials and community representatives, signally influences its effectiveness, notwithstanding the constraints of funds and resources, and the magnitude of the challenges.
8. Effective capacity-building and training programmes are indispensable to the successful implementation of the new system of local government and to significant advances in delivery, development and democracy. The current programmes are not adequate. It is clear that the Local Government, Water and Related Services Sector Education and Training Authority is not effective.
9. If formal and informal participation in municipal activities is put together, traditional leaders are more active in municipal affairs than is made out in the public discourse. The Inkatha Freedom Party does not agree with this observation. Clearly, traditional leaders can play an extremely important role in municipalities. The potential for this has to be developed.
10. Provincial governments can do more to assist municipalities, notwithstanding their financial and other limitations.
11. Despite its limitations of funds, resources and personnel, SALGA has to be far more effective than it currently is.
12. Understandably, perhaps, the new local government system has become a major site of waging intra-party struggles, apart from the obvious inter-party struggles. These party struggles should not serve to deter the implementation of the new local government system. In fact, political parties can play an important role in consolidating the new local government system. It is vital that a productive relationship develops between all political parties and municipal structures.
13. Some municipalities, without the most minimal financial, economic, revenue or other base do not seem viable – unless drastic measures are taken, not just by the municipalities concerned, but by provincial and national government, the private sector, communities and other stakeholders. Fundamental changes to municipal boundaries should be approached cautiously. Boundary issues should not, also, be conflated with the many other issues affecting the viability of municipalities. But it could be that in some cases boundaries might have to reviewed.
14. Municipalities find the deadlines set by the Department to implement certain provisions of the legislation or other aspects of the new local government system too onerous to meet. The deadlines do not sufficiently acknowledge the significantly differing capacities of municipalities.
15. While the case for increases in the remuneration of some councillors is not sound, in the case of others it certainly is. There needs to be a much more open and informed debate about what the possibilities and limits are of any increases.
16. There is a need to provide a firm framework for the remuneration of municipal managers.
17. It is clear that unless municipalities get more resources and increase service delivery, the new local government system will not be effectively implemented. At the same time, unless the new local government system is more effectively implemented, municipalities will not be able to secure more resources and significantly increase delivery.
18. Municipalities are in the early stages of a major transformation to a fundamentally new system of local government. With huge challenges and limited resources and capacity, municipalities are certainly making more progress than is commonly made out, even if less than they should. However, together with national and provincial government and other key stakeholders, they have to be significantly effective.

The House therefore resolves:

1. The Ministry and Department of Provincial and Local Government, South African Local Government Association (SALGA) and Portfolio Committee on Provincial and Local Government meet as soon as possible and decide on a programme of action based on the observations and proposals in the report. This programme takes into account the existing Strategic Plan, programmes and projects of the Ministry and Department, including the decisions taken at the President’s Co-ordinating Council workshop of 14 December 2001 and the subsequent provincial workshops, that are seeking to address the issues raised in the report. The programme should also take into account the wide range of responsibilities of the Department and its limitations of personnel, funds and other resources, and that there are limits, moreover, on how far the Department can intervene, as local government is a sphere of government in its own right. The programme should define clearly the respective roles of the Ministry and Department, SALGA and the Portfolio Committee. Ultimately, the Ministry and Department will be accountable to parliament for the implementation of the programme of action.
2. The programme includes consideration of the following:

1. There is a need for more education about the value and need for the two-tier system of district and local municipalities. Greater clarity on the precise division of powers and functions between local and district municipalities to come into effect from 1 July 2003 is also necessary, as is ongoing support to implement the new powers and functions. The financial implications of the new allocations of powers and functions needs to be clarified. It is also important that there is alignment between the Minister’s "authorisations" of the four "national " powers and functions of water, sanitation, electricity and municipal health and the MECs’ "adjustments" of the remaining powers and functions.
2. The Department-led project to provide greater clarity and certainty on the constitutional powers and functions of local government and the senses in which they are distinct from and overlap with provincial and national powers and functions should be speeded up.

 

3. Legislative and other means should be explored to ensure that provincial and national departments take municipal IDPs into account when shaping their plans, programmes, projects and budgets. Parliamentary committees should increasingly monitor whether national departments are taking into account IDPs in their plans, programmes, projects and budgets. Provinces should be encouraged to develop new growth and development plans that are shaped by and also shape IDPs. Municipalities also need to be given more assistance to link IDPs and budgets. That IDPs are dealt with by provincial departments of local government and budgets are dealt with by National Treasury also needs to be addressed. To ensure more effective integrated government, national departments should avoid by-passing provincial departments when dealing with municipalities. The pending Intergovernmental Relations Bill should seek to be part of the response to some of the issues raised here.
4. Municipalities need to do far more to contend with their financial challenges. They also need considerable support. The current support programmes need to be more co-ordinated and effective. The Ministry and Department need to explore the possibility of provincial governments deducting money owed by provincial departments to municipalities for rates, services and agency functions before allocating the departments the money due to them in terms of the provincial budget each year, provided municipalities provide timeous and verifiable accounts. A similar approach should be explored with National Treasury in the case of errant national departments. The review of the current local government financial system needs to be speeded up – and the new system that emerges must be commensurate with the new developmental model of local government. An important aspect of the new model should be a fundamental review of the formula used to decide on local government’s "equitable share" that takes greater account of the developmental imperatives of local government, including the need to provide free basic water and electricity services.
5. Municipalities should do more to ensure consistent and effective community participation. All municipalities should be encouraged to establish effective ward committees. Municipalities not established as ward types should consider establishing ward committee-like structures in a way that does not transgress the law. The Department should give more support for the establishment of ward committees. Section 73 (2)b of the Municipal Systems Act should be reviewed to provide for the possibility of large wards having more than ten members.
6. In consultation with the Ministry and Department of Water Affairs (DWAF), the Department needs to more effectively attend to the difficulties of capacity, logistics, infrastructure and funding in the way of extending free basic water to more people in the rural areas. The legal and other impediments to providing free basic services to farm workers on private farms needs to be addressed. The two Departments also need to address the concerns of municipalities about taking over DWAF water schemes and projects from 1 July 2003, and ensure that the hand-over is phased in sensibly and sensitively. In consultation with the Ministry and Department of Mineral and Energy, the Department needs to give effective support to municipalities to roll out free basic electricity from 1 July 2003. Municipalities also need to be informed more about the financial implications of the restructuring of the electricity industry.
7. There should be a concerted review of the capacity-building and training programmes undertaken so far to establish how useful they are and to develop new and innovative courses and programmes whose outcomes are more easy to evaluate. Greater and more effective co-ordination and co-operation, within a commonly accepted national framework, of all the local government capacity-building and training roleplayers is urgently necessary. The Department, SALGA and other stakeholders have to intervene to ensure that the Local Government, Water and Related Services Sector Education and Training Authority is more effective.
8. The White Paper and national framework legislation on the role of traditional leadership and institutions should seek to address the current differences around the role of traditional leadership and institutions and provide for a developmental role for traditional leaders.
9. The pending Intergovernmental Relations Bill should seek to develop further the role of provincial government in supporting local government.
10. Without intruding on the autonomy of SALGA, the Department and other relevant stakeholders should contribute more to SALGA playing a more effective role.
11. The Municipal Demarcation Board explores the possibility of reviewing the boundaries of municipalities referred to in section 13 above.
12. The task team, comprising representatives of the Department, National Treasury and SALGA , reviewing the remuneration of councillors needs to act with due expedition. Municipalities without a rates base to remunerate councillors adequately should be supported from the national fiscus to meet the costs. Over time, the possibilities should be explored, within the constraints of the national budget, of the national government meeting a substantial part of the costs of remunerating councillors.
13. The Minister’s guidelines on the remuneration of municipal managers need to be finalised as soon as possible. If it is constitutionally possible, the Minister should issue regulations instead, and, if necessary, legislative amendments should be effected to allow the Minister to do so.
14. In setting deadlines for municipalities to effect key aspects of the new model of local government, the Department should consult more with SALGA and take greater account of the differing capacity of municipalities.
15. There are other aspects of the observations from the report set out above for which practical decisions for action should be explored. In particular, there should be appropriate focus on the need to ensure gender equity in the implementation of the local government transformation process.

1. Consideration should be given to exploring the possibility of parliament allocating a week, some time in the next twelve months, for MPs to visit every municipality in the country, to evaluate progress in the local government transformation process and provide support for the consolidation of the new system of local government. If effected, members should submit their views to the Portfolio Committee to prepare a report for debate in the House.
2. There should be a report from the Ministry on progress in respect of this resolution given to the House within a year.
3. Consideration should be given to allocating the Portfolio Committee on Provincial and Local Government a full-time researcher for a one-year term to assist the Committee to fulfill its monitoring and oversight role in respect of the programme of action that flows from this resolution.