Report
of the Portfolio Committee on Provincial and Local Government on Budget Vote 5:
Provincial and Local Government, dated
The
Portfolio Committee on Provincial and Local Government, having considered
Budget Vote 5: Provincial and Local Government, reports as follows:
A. INTRODUCTION
1. The budget review of the Ministry and
Department of Provincial and Local Government (dplg) was
undertaken on
2. The budget briefings also served to
acquaint the Portfolio Committee with the plans, programmes and projects of the
Ministry and Department of Provincial and Local Government.
B. PARTICIPANTS
IN THE BUDGET HEARINGS
1. Those who appeared before the Committee
included Director-General Ms L Msengana-Ndlela; Deputy Directors-General Mr E
Africa, Mr P Flusk, Mr G Mokate, Ms M Molapo and acting Deputy
Directors-General Mr D Powell and Ms T Mketi; Chief Directors, Mr P Matomela;
Directors Mr O Cupido, Mr A Fray, Mr S Muthotho and Ms B Mkulu; Parliamentary
Officer Mr S Mashile, and Chief Financial Officer Mr C Clerihew.
2. The South African Local Government
Association (SALGA) was represented by members of the Executive Committee Ms S
Molokoane, Mr C Johnson, Mr K Mullagie and Mr S Wasa. The Commission for the
Promotion and Protection of the Rights of Cultural, Religious and Linguistic
Communities was represented by Dr M Guma, Ms M Bethlehem, Pastor M Nthla, Dr T
Magwaza and the CEO Mrs P Madiba. Local Government: Water
and Related Services SETA (LGWSETA) was represented by its Chief Executive
Officer Mr W Nkosi; Western Cape Provincial Manager Mr S Jappie; Administration
and Communications Manager Mr E Mnyakeng; Board Member Ms M Collins and
Councilor W Jensen. The Municipal Demarcation Board
was represented by its Chairperson Dr V Mlokoti; Chief Financial Officer Mr R M
Somanje and Manager Mr R H Monare. The National House
of Traditional Leaders was represented by its Chairperson Inkosi M B Mzimela;
Deputy Chairperson Khosi F Kutama, members Morena M F Mopedi; Hosi P C Ngove,
and Prince Z S Makaula and Communications Officer Mr S P Nkosi. The
delegation from the Municipal Infrastructure Investment Unit (MIIU) consisted
of Board Member Ms M Hesketh; Chief Executive Officer Mrs D Magugumela; and Financial Manager Mr J Lesaoane.
C. STRATEGIC
PLAN AND OVERVIEW OF BUDGET
1. The Director-General for Provincial and
Local Government, Ms L Msengana-Ndlela, identified the key challenges and gave
an overview of the perspectives and programmes of the Department and the
Budget. The Department was following on the strategic tasks of government as
defined in recent occasions, including the following:
·
The
State of the National Address on
·
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
2. 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.”
3. The Department’s strategic objectives is to:
·
Promote
a governance system that will enable service delivery in a developmental state.
·
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.
4. 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.
5. 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.
6. 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.
7. The additional R43, 4 billion of
nationally raised revenue added to provincial budgets further reinforces social
services and addresses social and economic infrastructure needs.
8. 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.
9. 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.
10. 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.
11. The Municipal Infrastructure Grant is increased by an additional R1, 7 billion over the MTEF.
D. SUPPORT
SERVICES
1. Achievements for this branch includes:
a. The finalisation of the development of the
strategic plan for the period 2005 – 2010
b. Corporate governance structures and
external IGR fora have been supported
c. Risk and audit management capacity has
been increased
d. Good financial management standards
maintained and the Department receiving an unqualified report
e. A total of 122 posts was filled during the
2004 – 2005 financial year
f.
Employment
equity targets have been improved
g. Staff development through systematic
training interventions achieved
2. It is noted that on
3. 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%.
4. 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.
5. 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
E. GOVERNANCE,
POLICY AND RESEARCH
1. The
key sub-programmes are Intergovernmental Relations (IGR), Development Planning,
Local Economic Development (LED), Traditional Leadership and
Institutions and International and Donor Relations.
2. The
priorities for 2005/06 include the promulgation of the IGR Framework Act, to
develop a Practitioners Guide to IGR and a programme of hands-on support. In
respect of the Assignment Framework - for guidelines to be
gazetted for public comment in terms of the Municipal Systems Act before
the end of 2004/05 financial year. On Section 139 of the Constitution
the aim is for completing draft policy framework/guideline before June 2005.
Priorities in respect of Provincial Support Framework is for IDP hearings in
all 9 provinces and a report produced on alignment of strategies
3. 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.
F. URBAN
AND RURAL DEVELOPMENT
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
2. The
main principles are shared decision-making, poverty targeting, demand driven
development and partnerships.
3. All
nodes have reviewed their current Integrated Development Plans (IDP). IDP
hearings are in process. All urban nodes have business plans and or strategy
documents in place to guide the implementation of the programme.
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.
7. 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.
8. Extended Public Works Programmes were launched in all provinces with a focus on the nodes.
9. Communication plans for the nodes are in
place and are being operationalised in conjunction with the Department
10. 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.
11. Challenges being faced
include:
·
Predictability
in resource allocation
·
Inadequate
project management
·
Integrated
planning between and across spheres of government
12. 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
G. SYSTEMS
AND
The main sub-programmes
include:
·
Management:
Office of the Deputy Director-General
·
Intergovernmental
Fiscal Relations
·
Local
Government Administrative Systems
·
·
Disaster
Management
·
Performance
Management and Monitoring Systems
·
·
Local
Government Anti-Corruption
·
Local
Government: Equity and Development
Intergovernmental Fiscal Relations
Priorities for 2005/2006 include:
·
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
Priorities for 2005/2006 include:
·
Cabinet
approval for the Local Government Employees Bill
·
Support
and ensure successful local government elections
·
Provide
effective bargaining and dispute resolutions for local government
Priorities for 2005/2006 include:
·
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
Priorities for 2005/2006 include:
·
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.
Performance Management
Priorities for 2005/2006 include:
·
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
Priorities for 2005/2006
·
Finalise
the organizational and funding model and reach agreements with various partners
·
Establish
and launch the academy as a pilot
Local Government Anti-Corruption
Priorities for 2005/2006
·
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
H. FREE
BASIC SERVICES AND INFRASTRUCTURE
I. South
African Local Government Association (SALGA)
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.
J. NATIONAL
HOUSE OF TRADITIONAL LEADERS (NHTL)
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
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.
Concerns
raised by the Committee included what the NHTL has done to:
·
Promote
the role of traditional leadership within a democratic constitutional
dispensation.
·
Enhance
unity and understanding among traditional communities.
·
Enhance
co-operation between the NHTL and the various provincial houses with a view to
addressing matters of common interest, as defined by its establishing Act and
how much was spent on these objectives
The
Committee would engage with SALGA as to what their role is in respect of the
issues affecting the NHTL. The report from the NHTL was noted
but could not be accepted, until the NHTL and dplg meet to make sure that
before
K. Local Government, Water and Related
Services Sector Education and Training Authority (LGWSETA)
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
2. 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.
3. The LGWSETA gave a detailed account of their
commitment and performance during the year, as well as their underperformance,
and reasons for underperformance. All stakeholders acknowledged the
underperformance assessment and LGWSETA underwent a
introspection on its operations. A key outcome of their analysis was the
appointment of the Chief Financial Officer to provide strategic direction and
to ensure implementation of strategy.
L. Municipal Demarcation Board
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
3. 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
4. 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
5. 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.
6. 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.
M. Municipal Infrastructure Investment
Unit (MIIU)
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.
2. Key Focus Areas included:
- Project
Implementation:
·
MSP
creation
·
Revenue
enhancement
·
Credit
enhancement
·
Regulation
·
Other
private sector participation
- Institutional Preservation
·
MSP
standardisation
·
Contract
monitoring and evaluation
·
Institutional
memory
·
Marketing
and communication
·
Training
and development
- Internal Focus Areas
·
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
- External Focus Areas
·
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
3. The MIIU concluded their presentation to the
Committee with their Business Plan and Key Performance Indicators.
N. Commission
for the Promotion and Protection of the Rights of Cultural, Religious and
Linguistic Communities
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
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
3. 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.
4. The Commission has begun a process of
recognizing and defining community councils. It has undertaken road shows to
five provinces in which it organized mini-conferences. These visits were also used to mobilize interest in the National
Consultative Conference.
5. The main focus of the Commission this
financial year is to consolidate itself; organize a successful National
Consultative Conference; advance its work on Community Councils; explore the
possibilities of launching a cultural dictionary; and identify a role for
itself in responding to the challenges of managing cultural diversity in
schools, among other issues.
O. CONCLUSION
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.