Budget and Programmes: briefing by Department

Meeting report

LOCAL GOVERNMENT AND ADMINISTRATION SELECT COMMITTEE
22 May 2002
BUDGET AND PROGRAMMES: BRIEFING BY DEPARTMENT

Chairperson: Mr B Mkhaliphi (ANC)

Documents handed out:
Presentation on Budget and Programmes
Local Impact through IDP
IDP as a tool of Decentralised Democratic Governance in SA
Financial Position of Local Government
Vote 5: Provincial and Local Government
Integrated Relations: Overview of 2002/3 Outputs (Appendix)

SUMMARY
It was a common understanding that in order for Integrated Development Programme (IDP) to be an effective and sustainable tool, it should not only be the burden of the local government (as implied by the Municipal System Act of 2000). Rather, it should go hand in hand with the implementation of Urban Renewal Programmes (URP) and the Integrated Sustainable Rural Development Programme (ISRDP) as initiated in the office of the Presidency. The IDP is one of the major tools for Decentralised Governance in South Africa. However, some of the Members felt that the scope of the meeting was too broad and that it should be narrowed down so as to exhaust important issues.

MINUTES
Mr C Clerihew: Acting Director General, outlined the main programmes contained in the Budget Vote, emphasising the objective of the Department, that is, to have an effective and integrated system of government consisting of three spheres of the government working together to achieve sustainable development and service delivery.

Ms J Manche: Deputy Director-General: Institutional Reform and Support, Department of Provincial and Local Government presented briefings on their Constitutional Mandate. She explained the principle of Co-operative Government and Intergovernmental Relations (IGR) as mandated by Chapter 3 of the Constitution. She emphasised that while delivery is expected to take place at local level, there must be co-operation between all spheres of the government to realise that goal.

Ms J Manche mentioned that local government was not productive because of the demarcation of municipal councils. She argued that some of the limitations of Intergovernmental Relations (IGR) are that more money was spent on restructuring of local government rather than having the work done. The IGR is led by the office of the President and there must therefore be co-ordination among all structures of the government. She concluded her presentation by giving the Auditor General Financial Report as at 31 March 2001.

Discussion
Ms C Botha (DP) raised a concern that the Auditor-General Report is having little to do with the financial position of municipalities. She wanted to know if there has been any improvement to the ability of the municipalities to manage their own budget.

Ms J Manche answered that there has been restructuring of local government. A team of experts have been deployed in all provinces to help them through that process. Fairly, a number of municipalities were able to cope with transformation.

Mr M Makoela (ANC, Northern Province) asked what the role of civil society in participatory democracy was.

Mr J Clerihew answered that there should be co-operation among the government structures, private sectors, NGO, and traditional leadership for the Integrated Development Programme (IDP) to succeed. Civil society works through the IDP which grants funding for development management and capacity building.

Mr M Makoela asked if the Department has the capacity to spend money allocated to them, considering millions were not spent.

Mr P Maloi (ANC, North-West) raised his concern about the way in which this meeting is being run because it seemed there was no focus on specific issues.

Ms Manche responded that the Department deals with many issues. Furthermore, detailed figures of local government expenditure cannot be made public, as they only have to make aggregated figures. Integrated Sustainable Rural Development Programme (ISRDP) is not a super-fund body like Reconstruction and Development Programme (RDP). Money is funded per programme and national revenue is financing the local government support grant.

Mr M Mkaliphi wanted to know how these programmes are identified.

Mr Clerihew answered that municipal councils identify all programmes. They then apply to the Department for approval. The Department looks at the potential sustainability of these programmes before funding them. This is achieved by the co-operation of the Department of Labour and the Treasury.

Mr M Ralane (ANC, Free state) argued that what the Department calls 'saving' is actually under-spending because of lack of manpower to fill vacant posts. That people are being evicted from their houses and the Department seems to not having enough resources to intervene. He argued that if there were integrated government structures, these problems could have been easily solved.

Ms J Manche reiterated that the local government has been undergoing major restructuring. It was not feasible for the Department to physically dump the money knowing very well that it is not going to be effectively spent. In addition, there is a process to be followed when filling strategic post, as that will need the approval of the minister. However, the government need to have a new strategy about how to deal with cases relating to people who are not able to pay their subsidies. Once people's houses are auctioned because of their inability to pay; they are no longer more eligible for a government subsidy.

Mr M Ralane was not convinced about this answer. As the result, he asked that the issue be revisited in the near future.

Mr Clerihew agreed that the scope of this meeting was too broad. At the following meeting there should be consensus beforehand about points to be focused on. Nevertheless, he thanked Members for their co-operation. He mentioned that he was looking forward to working with them as he has been doing with portfolio committees (on the other side of the house).

The meeting was adjourned.

Appendix:
Intergovernmental Relations: Overview of 2002/03 outputs
Presentation to the Select Committee, 15 May 2002

Context
lntegrated governance - improve service delivery and policy-making by strengthening practices of cooperation between spheres of government (SON, July 2001and January 2002 cabinet lekgotla resolutions).

Context cont.
DPLG mandate - to enhance the role of local government in IGR, and to guide co-ordination between national/provincial departments and municipalities centered on IDP (Strategic plan, cabinet Lekgotla and PCC resolutions).
DPLG is a "crosscutting department" - with 5 G&A depts..

Context cont.
"Crosscutting programs" - practical lessons for integrated service delivery and co-operative government (ISRDP).
Chief Directorate established - boosting research and policy development capacity, specific focus on intergovernmental fiscal relations.

Budget provision
1998/99 (R2.4 million, 0% growth).
1999/00 (R3 .7 million, 54.1% growth).
2000/01 (R 3.5 million, - 5.4% growth).
2001 /02 (R 4.7 million, 34.3% growth).
2002/03 (R 6.0 million, 27.7% growth).
2003/04 (" ").
2004/05 (R6.3 million, 5% growth).

Progress 2001
Supervision framework (vote 5) - intervention is the end point of a process to monitor and support municipalities; Draft framework currently under consultation within LGMINMEC. Constitutional amendments -Additional proposals to be submitted to Cabinet.
Assignment (vote 5) - division between B's&C's an immediate priority; Assessment of National departments intending to assign completed, problems include definitions and un-funded mandates.

Progress cont.
Special PCC on local government of December 14 2001- resulted in an intergovernmental compact on local government transformation; Program of Action to be submitted to Cabinet.
lSRDP - intergovernmental system established; IDTT operational.

Progress cont.
Policy research completed - on community participation, best practice in service provision, MSP's, LED strategies.
Provincial-local IGR guidelines and reference book - drafts completed and currently under consultation.

Progress cont.
WSSD - position paper on local governance in sustainable development produced.
Research bulletin published.
Winter school on IGR - held in October 2001 at UP.
Planning cycle - G&ATT leading implementation.
University partnership program established (core group: UNITRA, AFREC, UP).

Expected outputs:
2002/03
Framework for managing assignment of powers and functions to local government
Report assessing schedules 4 and 5 of the constitution
Legislation regulating sections 100,139 and 41(2))

Outputs cont.
Intergovernmental guidelines for integrated development planning - to implement cabinet lekgotla resolutions (vote 5).
Framework for monitoring, support and supervision - work continuing with National Treasury. Municipal financial services proposals to give effect to PCC resolutions on municipal financial reform to be submitted to Cabinet in May.
Monitoring IGR - development of instrument, work program with provinces and municipalities.

Outputs cont.
PCC action program -submission to cabinet in May 02.
Review of PCC - new agenda setting process being developed.
Section 185 legislation, and establishment of commission