Overview of the 2006/07 Annual Report to the Portfolio Committee on Provincial and Local Government by Ms Lindiwe Msengana-Ndlela, Director General of the Department of Provincial and Local Government, Cape Town

06 November 2007

The Chairperson,
Mr Lechesa Tsenoli;
Members of the Portfolio Committee;
Ladies and Gentlemen;

Introduction

I would like to once again thank you and the members of the committee for affording us the opportunity to present our 2006/7 Annual Report to you. We are committed to the principles of Batho Pele (People First), which require of us high levels of accountability to Parliament and the South African public, at large. As we deliberate on this report today, I would also like to extend our appreciation to each and every member of the committee for constructive inputs and suggestions that you have made to the Ministry and the Department in the year under review. We will continue to value your individual and collective guidance as we discharge our mandate.

Financial performance and future outlook

Honourable Chairperson

In tandem with the increasing developmental mandate, the dplg's budgetary allocation from the national fiscus has been increasing over the past decade. In the last five years, this allocation has increased steadily from R4.7 billion in 2001/02 to R25.3 billion in 2006/07 financial year.

As we look ahead towards the next financial year and Medium Term Expenditure Framework period, members will note the further allocations that were announced by the Minister of Finance, Mr Trevor Manuel who presented the Medium Term Budget Policy Statement to Parliament last week. Accordingly, the dplg budget has now reached the R30 billion mark in the 2007/8 and this will increase to approximately R32,4 billion and R39,2 billion in the 2008/9 and 2009/10 financial years, respectively.

The management of these resources has been a key priority of our department throughout this period. We are pleased to announce that, once again, the dplg has received an unqualified audit opinion from the Auditor-General. With high levels of managerial commitment, this 2006/07 Annual Report represents yet another milestone and a tangible set of financial and strategic outcomes, as we endeavour to serve the South African public.

Strategic Outcomes

The strategic objectives that guided our programmes during this period were enumerated as follows:

· Ensuring stability, predictability and efficiency of the governance system;

· Strengthening provincial governance and accountability;

· Ensuring effective functioning and stability of local government;

· Monitoring performance and evaluating service delivery; and

· Strengthening the dplg's corporate capability.

We will discuss the details of performance in these areas today. In summary, it is clear that we have started to address some of the fundamentals with regard to the intergovernmental system, community participation and empowerment, the role of the institution of traditional leadership and other key stakeholders in development. The 2006/7 financial year was also an important year as we commenced the implementation of a five year collective programme of these stakeholders, commonly referred to as the "Local Government Strategic Agenda, 2006 - 2011".

Previously, we indicated that some of the most basic fundamentals that must be addressed in the second term of local government (2006 to 2011), relate to capacity, accountability and leadership at local level. Coupled with these fundamentals, practice also pointed to the need for policy refinement, where appropriate, in order to improve performance. These were the basic tenets of our approach to Project Consolidate since we initiated it in 2004/5 through to 2006/7.

Capacity development

In the year under review, we have increased our efforts in supporting provinces, metropolitan and district municipalities to develop Growth and Development Strategies (GDSs). This was the first time that this initiative was introduced at district level. All 46 districts and 6 metros were able to host Growth and Development Summits with the full participation of community representatives and other important stakeholders.

Furthermore, by the end of the financial year, our department had established support systems that would ensure a 100% adoption rate of municipal Integrated Development Plans (lOPs). This was a significant improvement from the mere 40% adoption rate that was registered in 2002/03 financial year.

We have also continued to mobilise and deploy technical experts to various municipalities. It has been encouraging to see the growing number of individuals, public and private organisations, who have offered their expertise in these capacity building initiatives. Our interventions, through the deployment of technical expertise for purposes of infrastructure development have borne fruit. The spending patterns of municipalities have improved from some individual cases of 50 percent to 98 percentage spent from the 2005/6 to the 2006/7 financial year.

In recognition of the need to balance our social delivery programmes with a more strategic approach to economic development, we launched the National Framework for Local Economic Development (LED), complemented by a capacity building programme. Our intention is to contribute towards the efforts of government and other sectors in society in creating an improved environment for economic development in local areas.

Accountability and leadership development

Of significance, has been the greater attention that we have paid to accountability measures and the enforcement of existing local government legislation. The Municipal Performance Management Regulations that we published are intended to provide a framework for employment of municipal managers, the capping of bonuses and clearer procedures for performance reviews.

We have complemented this initiative by providing leadership development programmes to mayors, speakers, councillors and municipal officials. This initiative has been undertaken in partnership with the South African Local Government Association (SALGA) and the Local Government Sector and Education and Training Authority (LGSET A).

Conclusion

This Annual Report provides greater detail on these important initiatives. The programmes are presented in the following sequence:

· Administration

· Governance, Policy and Research (including Traditional Leadership)

· Urban and Rural Development

· Systems and Capacity Building (including Disaster Management)

· Free Basic Services and Infrastructure

· Provincial, Local and other Transfers

We hope that with the support of all of our stakeholders, we will stay on course and focus on being a reliable institution in facilitating service delivery and development in South Africa. We value the oversight role of parliament and this portfolio committee and we hope that our Department will continue to benefit from these interactions today and in the medium to long-term.

I thank you.