• The State of the National Address on 11^th February 2005

• The speech of the Minister for Provincial and Local Government, Mr F S Mufamadi during the debate on the State of the Nation Address

• The Budget Speech delivered by the Minister of Finance, Mr T Manuel on the 23^rd of February 2005

1. The Director-General said "We have also refined our Strategic Plan for 2005 – 2010 to position the dplg to proceed and address the needs of our people and respond appropriately to the challenges of the second decade of democracy."
   
2. The Department’s strategic objectives is to:
   

• Promote a governance system that will enable service delivery in a

• Strengthen provincial governance and accountability.
  
• Consolidate local government’s capability of impact to achieve sustainable development.
  
• Monitor performance, evaluate service delivery and communicate development.

• Strengthen the dplg organisational capacity and capability.

1. The Strategic Plan of the Department has the following key focus areas:
   

• Bringing greater stability and predictability to the entire governance system, including the intergovernmental system.

• Building key capabilities of a developmental state in all spheres of government in order to address the challenges of the two economies.

• Establishing and implementing sustainable monitoring and evaluation systems and indicators to assess performance and service delivery.

• Strengthening the Department’s corporate capability, which includes staff and institutional capacity, training, corporate systems and a public sector service excellence orientation.

1. The Director-General indicated that financial resources have been set aside in order to enable successful local government elections in the 2005/06 financial year. An amount of R 23,6 million has been allocated to the Municipal Demarcation Board for the 2005/06 and supplementary funding to the Independent Electoral Commission through the Department of Home Affairs.
2. The efforts of the Department in the medium to long term will be directed towards monitoring performance and the practical impact of service delivery, particularly at provincial and local government. The Department seeks to derive maximized benefits from periodic assessment of performance through the Government’s cluster system, the Presidential Co-ordinating Council and the Local Government MINMEC.
3. The additional R43, 4 billion of nationally raised revenue added to provincial budgets further reinforces social services and addresses social and economic infrastructure needs.
4. Of the R43, 4 billion added to the provincial share over the MTEF, R16, 6 billion is allocated to the equitable share. Over R26, 8 billion of additional allocations to provinces is in the form of conditional grants.
   
5. By providing technical support to selected provincial departments, Government is building institutional capacity to speed up infrastructure delivery and ensure effective spending of the R40, 7 billion provincial capital budget over the next three years.
6. Additional allocations of R5, 4 billion over the MTEF to the local government sphere are aimed at supporting municipalities to provide free basic services, improve service delivery capacity and maintain and extend municipal infrastructure.
7. The Municipal Infrastructure Grant is increased by an additional R1, 7 billion over the MTEF.
   
   

1. Achievements for this branch includes:
1. The finalisation of the development of the strategic plan for the period 2005 – 2010
2. Corporate governance structures and external IGR fora have been supported
3. Risk and audit management capacity has been increased
4. Good financial management standards maintained and the Department receiving an unqualified report
5. A total of 122 posts was filled during the 2004 – 2005 financial year
6. Employment equity targets have been improved
7. Staff development through systematic training interventions achieved

1. Women at management level constituted 19% of the total SMS staff complement. This is an increase of 17,6% compared to the current profile and is 6,6% above the Public Service target of 30%.
   
2. The target for people with disabilities has dropped by 0,93% compared to 28 February 2005 and there is a gap of 2.33% to achieve the Public Service target of 3%. The drop is as a result of natural attrition.
   
3. Priorities for this branch include:

• Implementing a development programme
• Articulating and entrenching Batho Pele
• Maintaining corporate systems
• Developing dplg as a center of excellence
• Institutionalising the ethos of risk management

1. The priorities in respect of LED Strategy are for the strategy and implementation framework to be communicated within government. In respect of Donor and International Relations the aim is to have the operational plan developed and introduced in 2005/06.
   

1. The key objectives are to:

• Eradicate poverty and under-development
• Implement government’s vision of "developmental local government" and the "developmental state"
• To pilot integrated planning & budgeting across the 3 spheres
• To ensure sustainable development

4. Guidelines developed for how national and provincial governments should participate in Integrated Sustainable Rural Development Programmes (ISRDP) and Urban Renewal Programmes (URP).
   
5. Nodal anchor projects are showing steady progress and showing a balance between the economic and social content.
   

6. All relevant national departments were audited to determine their investment in the nodes. Work has commenced with SOE’s.

6. With regard to skills development programmes the Department of Labour has signed a memorandum of understanding with Alexandra to the value of R23 million over a 3-year period. All urban nodes are currently undertaking skills audits with a view to entering similar memorandum of understanding.
7. Extended Public Works Programmes were launched in all provinces with a focus on the nodes.
8. Communication plans for the nodes are in place and are being operationalised in conjunction with the Department
9. In 2004/2005 R2, 2 billion was allocated to the six municipalities with URP nodes, compared to R1, 6 billion in 2003/2004. This increase is a reflection of a policy decision to increase resources to local government.
10. Challenges being faced include:

• Predictability in resource allocation
• Inadequate project management
• Integrated planning between and across spheres of government

4. Priorities for 2005/2006 include:

• To institutionalize existing alignment approaches across the 3 spheres to strengthen co-ordination on ISRDP and URP
• To enhance nodal capacity and integrate programmes into "Project Consolidate"
• To maintain current ISRDP and URP initiatives
• To finalise and operationalise the nodal financing protocol
• To communicate and market ISRDP and URP across the 3 spheres
• To co-ordinate monitoring and evaluation of ISRDP and URP

1. The main sub-programmes include:

• Management: Office of the Deputy Director-General
• Intergovernmental Fiscal Relations
• Local Government Administrative Systems
• Capacity Building Systems
• Disaster Management
• Performance Management and Monitoring Systems
• Local Government Leadership Academy
• Local Government Anti-Corruption
• Local Government: Equity and Development

Intergovernmental Fiscal Relations

• Finalisation and implementation of Payment Protocol
• Best practice billing systems initiative implemented and preliminary lessons shared
• Municipal Services Debt Reduction Programme implemented
• Revised Local Government Share Formula finalised
• Support for municipalities in the implementation of the Property Rates Act.

Local Government Administrative Systems

• Cabinet approval for the Local Government Employees Bill
• Support and ensure successful local government elections
• Provide effective bargaining and dispute resolutions for local government
  

• Improved capability to assess the capacity building needs of municipalities through web-enabled tools
• Ongoing support to implement their assigned powers and functions
• Extend the knowledge-sharing programme to all district municipalities.
  

Disaster Management

• Implementation of the Disaster Management Act
• Disaster Management Framework and regulations distributed across government
• Monitoring strategy development for Disaster Management Plans
• Ongoing improvement of the Integrated Information
• Management System.

• Provide increased support to and improve monitoring of municipal Performance Management Systems
• Roll-out an institutionalized annual performance reporting system for municipalities
• Improve the quality of and participation in the Municipal Performance Excellence (VUNA) Awards

• Finalise the organizational and funding model and reach agreements with various partners
• Establish and launch the academy as a pilot

• Finalise the Local Government Anti-Corruption Strategy
• Extend the roll-out of the number of pilot municipalities
• Prepare for the implementation of a Local Government Anti-Corruption Campaign

• The Department hopes, in the next financial year, to build capacity of struggling municipalities identified in the study and through Project Consolidate.

• Develop a monitoring system to measure impact of Free Basic Services (FBS) and develop indicators. Finalise guidelines for alternatives for FBS where no infrastructure exists.

• They would also like to finalise the targeting framework for poor households and support the revenue enhancement capacity of municipalities.

• Develop communications strategy for FBS and support alignment of the FBS structures in provinces.

• Strengthen provincial capacity to support municipalities.

• The aim is also to hold district wide information sessions on the importance of ring fencing the electricity business and mobilize community involvement in service delivery through Municipal Community Partnerships.

1. SALGA gave a breakdown of all the key achievements for 2003/04 and also the key priorities and progress with regard to programmes for 2004/05.
2. SALGA will be hosting the UCLGA Founding Congress in May 2005 and will have the National S78 Learning Conference as well.
3. SALGA’s main source of income is its membership fees, which amounts to 59% of its total revenue for 2003/04 financial year. R 20,3 million of the total revenue by the end of 2003/04 came from dplg, whilst only R 17,5 million is expected by the end of this fiscal year.

1. The National House of Traditional Leaders sadly reported that they had lost its CEO, Mr Malungisa Elliot Gobe, who died whilst on an official visit to Zimbabwe on 2 March 2005. The Zimbabwean Government expressed its sympathy and offered assistance during the burial process.
2. The NHTL undertook a number of activities during the year under review. These activities range from the functions the NHTL has to discharge, and which are inward looking or in-house in nature, to those activities involving others which cover the country in its entirety, as well as those relating to engagements beyond the country.
3. The NHTL aims to embark on continent-wide visits/tours to establish the Continental House of Traditional Leaders of Africa
4. The process of securing a chamber for the proper execution of the duties of the NHTL in ongoing. The NHTL appreciates the efforts of the Committee on this issue.
5. The NHTL looks forward to having a dialogue with the Committee on matters relating to the functioning of the House and will pursue securing a dialogue with the Presidency on the implications of Chapter 7 and 12 of the Constitution.
6. The total allocation approved by National Treasury is earmarked and may not be adjusted by dplg. In respect of the 2005/06 financial year and the two outer years of the MTEF, there was no increase above the base-line amounts as indicated in the previous MTEF. The House has requested for an additional allocation in respect of the three years in order to address the priority areas as determined by the House.
7. The report of the NHTL demonstrates that the NHTL is committed to its statutory mandate, however, there are issues which impact on its effectiveness. The NHTL will continue to engage the Committee with a view to reaching a resolution on these matters.

• Promote the role of traditional leadership within a democratic

• Enhance unity and understanding among traditional communities.

• Enhance co-operation between the NHTL and the various provincial

1. The LGWSETA is one of the 25 Setas that that were established by the Minister of Labour under the National Skills Development Act to achieve the objectives of National Skills Development Strategy (NSDS). Objectives of the NSDS include the following:

• Develop a culture of high quality lifelong learning
• Fostering skills development in the formal economy for productivity and employment growth
• Stimulating and supporting skills development in small business
• Promoting skills development for employability and sustained livelihoods
• Assisting new entrants into employment

1. Municipalities are strategically placed to assist in the identification of economic and social opportunities, which, could lead to interventions to alleviate poverty, improve service delivery and enhance the social and economic conditions in the community.

1. The Municipal Demarcation Board briefed the Committee on all the concerns and queries raised at the previous review in 2004 and gave clear and concise answers to these.

2. Total expenditure, excluding donor funding and expenditure on publication of ward boundaries, amounted to R 26 622 928. Balance of R 395 370 at 31 March 2005 fully committed. Decision taken in consultation with National Treasury and Auditor-General is to avoid over-expenditure in 2004/2005 year and to view the additional R 9,1 million allocated to the Board in the latter part of 2004/2005 to assist with ward delimitation, and thus added to the 2005/06 MTEF allocation.

2. Outputs and developments in the 2004/2005 financial year include:

• Ward delimitation
• Municipal Capacity Assessments
• Analysis of the Municipal Roads and Public Transport Functions
• Study of current metropolitan municipalities and implications for future categorization of additional Category A municipalities

1. Ward delimitation was done in terms of the Local Government Municipal Structures Act, 1998. Wards were being delimited for local and metropolitan municipalities. There were 3 754 wards in the 2000 elections and 3878 wards for the 2005/6 elections. The number of wards, and ward boundaries changed as a result of:

• An increase in the number of councillors
• Migration of voters
• Additional voters’ registered in wards
• Requirement that each ward in the municipality must have approximately the same number of registered voters

1. Total receipts of R 23,9 million, with an additional R 9,1 million allocated in the last part of the financial year. R 3,9million will go to gazette for wards. Indications are that the allocation for 2005/06 will be adequate for the work of the Board in this financial year.
2. A larger proportion of the Board’s receipts for 2004/05 has been spent on the core business of the Board, with support services taking up a visibly smaller proportion. The Board has deferred expenditure on the publication of wards to the current financial year, to avoid over-expenditure on the 2004/05 allocations. The Board has had a successful year in terms of outputs. The Board also has a strategic plan in place to guide their operations going forward. Indications are that the MTEF allocations for the current year 2005/06 will be adequate to cover operations for the year. Estimates indicate a shortfall for the years 2006/07 and 2007/08.

1. The MIIU’s gave the Committee a breakdown of its Key Performance Areas for 2004/05 and a list of completed projects undertaken in respect of MSPs, Revenue Management and Loan Guarantees.

• MSP creation
• Revenue enhancement
• Credit enhancement
• Regulation
• Other private sector participation

• MSP standardisation
• Contract monitoring and evaluation
• Institutional memory
• Marketing and communication
• Training and development

• Provide on-going technical assistance to municipalities
• Management of a local government loan guarantee programme
• Control monitoring and evaluation
• Resourcing of MIIU and staff development
• PFMA compliance

• Liaison with other local government strengthening programmes
• Collaborate with National Treasury on regulation of and guidelines for MSPs
• Engage the financial sector on issues of municipal access to finance

1. One of the Commissions main activities was the hosting of the National Consultative Conference (NCC) in December 2004. The NCC created space for interaction and expression of the needs and aspirations of various communities. The Commission is a new institution and the youngest of the institutions established to strengthen democracy in South Africa.
2. The strategic plan focuses on the following:

• Participative research and monitoring
• Awareness
• Education and advocacy
• Development of diminishing cultural heritage
• National and international relations
• Consultation
• Strategic interventions

1. The Commission received a clear mandate from the NCC and will focus on:

• Structured consultation through community councils and task teams
• Systemic involvement of all marginalized voices
• Basic and applied research and policy development
• Partnerships with key institutions
• A process of feedback on a regular basis.

1. The Committee believed that submissions are in part a response to past resolutions and mandates.
2. The Committee further records some of its concerns and directives recorded in its Portfolio Committee Report in 2004 as adopted by Parliament and directs the Department and institutions that appeared before it to implement the decisions of the Committee are still outstanding.
3. The Committee further commits itself to strengthening its oversight role through visits to Municipalities.
4. It thanks parties concerned for the progress made so far.

Report to be considered.

Adopted.

______________________________ --------------------------------

Ms N R Ntshulana-Bhengu DATE

Chairperson: Portfolio Committee on Provincial and Local Government

Committee Room V227, 2^nd Floor, Old Assembly Wing, Parliament