Www.salga.org.za 1 Welcome… IMFO Conference 12-14 September 2011 Local Government Turnaround...

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Welcome…

IMFO Conference 12-14 September 2011

Local Government Turnaround Strategy – constraints and success stories

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General• Local Government Turn Around Strategy adopted by Cabinet on 2 December 2009• Aimed at counteracting those forces that are undermining Local Government system. • It was anticipated that the LGTAS would address and improve the way in which other spheres of government interact with municipalities• Root causes for some of these problems include:

• Systemic factors, i.e. linked to model of local government;

• Policy and legislative factors;

• Weaknesses in the accountability systems;

• Capacity and skills constraints;

• Weak intergovernmental support and oversight; and

• Issues associated with the inter-governmental fiscal system.2

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One of the main problems experience by municipality as addressed in the LGTAS is Financial Management, in particular :

• Municipal budget and income management

• Intergovernmental Fiscal System (including the Equitable Share (ES) and the Municipal Infrastructure Grant (MIG))

• Serious leadership and governance challenges in municipalities including weak responsiveness and accountability to communities

•The following actions were expected from municipalities, but no additional funding or other resources was provided to municipalities to ensure compliance:

• Optimised revenue collection and improved billing, customer care, indigent and credit control policies

• Work towards sustaining clean audit outcomes by 2014. Those that can achieve the target earlier must do so.

• Improved public participation and communication including effective complaint management and feedback systems

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DCOG approach to LGTAS:

Pre-2011 priorities identified in the LGTAS and progress achieved:

• Address immediate financial and administrative problems in municipalities

• The dream of the rapid response team to address immediate problems provided for in the LGTAS did not materialise nor was additional funding provided to municipality to implement the LGTAS.

• Regulations to stem indiscriminate hiring and firing

• The Local Government Municipal Systems Amendment Act, 2011 was promulgated and set the path for the professionalisation of the municipal administration.

• The Regulations on the disciplinary procedures for senior managers were published.

• Ensure & implement a transparent municipal supply chain management system

• No support in this regard has been provided to municipalities in this regard. DCOG and National Treasury considering new proposals not yet disclosed.

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Pre-2011 priorities identified in the LGTAS and progress achieved (Cont.):

• National and provincial commitments in IDPs

• A survey done by SALGA in municipalities identified this as the biggest constraint of the LGTAS that despite national and provincial commitments in the IDP identified as a pre-2011 priority, there has been no increase in the participation of and commitment to the IDP by national and provincial sector departments.

• Differentiated responsibilities and simplified IDPs (Agreement with each municipality on the ideal scope of functions to be provided and how best the State can support service delivery through intergovernmental agency arrangements)

• Despite this aspect also having been included in Outcome 9, no progress has been made in implementing a differentiated approach in general, but also with specific regard to IDPs and all municipalities are required to prepare a complete IDP on an annual basis.

• Funding and capacity strategy for municipal infrastructure

• Outcome 9 also identified this as a requirement, but to date the strategy has not been finalised. 5

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• Intergovernmental agreement with metros on informal settlement upgrade including alignment of MIG (Cities) and Housing Subsidy grants

• 8 municipalities were accredited to perform certain housing functions, but the alignment between the MIG funding and housing subsidies are still outstanding.

• Review and rearrange capacity grants & programmes, including Siyenza Manje support for a more effective support and intervention programme including Rapid Response Teams and Technical Support Units

• As already indicated, neither the rapid response teams nor the technical support units have been established.

• Siyenza Manje proceeded and was strengthened by Operation Clean Audit being launched in 2010.

• Despite no dramatic increase was observed for the 2009/2010 financial year, it is believed the results from Operation Clean Audit will only be visible for the 2010/2011 financial year.

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•Strengthen Ward Committee capacity & implement new ward committee governance model

• DCOG is in the process of reviewing the governance model of ward committees while SALGA is of the opinion that public participation goes much wider than ward committees although it is an important part thereof.

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The post 2011 LGTAS priorities - Vision 2014:

• Each municipality has the necessary ICT infrastructure and connectivity

• No progress has been made in this regard.

• All provinces and municipalities should have clean audits

• Siyenza Manje proceeded and was strengthened by Operation Clean Audit being launched in 2010.

• Violent service delivery protests are eliminated

• No progress has been made in this regard.

• Municipal debt is reduced by half

• Neither National nor Provincial Government has taken any steps to assist municipalities in this regard, despite a substantial amount of the current municipal debt being owed by government departments.

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Key instruments identified to be utilized by DCOG ensure that there are dedicated resources for implementation of the LGTAS:

• A number of working structures to guide and steer the LGTAS, including the technical support team as well as the rapid response team.

To date neither the technical support team nor the rapid response team has been established, which is probably the biggest disappointment and failure of the LGTAS

• A working group for donor relations, stakeholder management, resource acquisition, contract management and monitoring

A meeting with stakeholders other than the three spheres of government was held by DCOG in 2010, but the working group did not materialise.

• Ensuring Siyenza Manje is under the leadership of DCOG for the purpose of coordinating and organizing support to Local Government

An agreement was recently reached between the DBSA and DCOG on the future of the project to ensure the future thereof.

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Key instruments identified to be utilized by DCOG to ensure that there are dedicated resources for implementation of the LGTAS (Cont.):

• Implementing the MIG policy review proposals including:

• Institutional arrangements to support infrastructure planning, project preparation and management and contract management

• Leveraging of MIG allocations to fund and finance infrastructure at required scale

• Establishment of national Communications Task Team for coherent, coordinated messaging campaign.

• The MIG policy review, although included in Outcome 9 has not been completed.

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Key instruments will be utilized by DCOG to ensure that there are dedicated resources for implementation of the LGTAS (Cont.):

• Re-organizing the way the Municipal Systems Improvement Grant (MSIG) is structured and complementing this with the establishment of Rapid Response Teams and Technical Support Units

•As indicated the neither the Rapid Response Teams nor the Technical Support Units have been established and the review of the MSIG has not been done.

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National Treasury Support Model for Financial Management developed in support of the LGTAS:

•Multi-pronged approach to capacity building and support on Financial Management reforms, led and directed by National Treasury, MFMA Implementation Team

•Three models of support

• skills to be transferred to interns

• short term and long term support

• specialized support

• Interns were deployed in municipalities and capacitated

•Selection of a model will depend on the nature and scope of problem within provinces and municipalities

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National Treasury Support Model for Financial Management developed in support of the LGTAS (Cont.):

•From April 2010

• 55 experts to be deployed to NT and PT

• 5 experts to assist in overarching MFMA implementation in all municipalities, working with provinces

• 5 experts will focus specifically on budget related reforms in the largest municipalities

• 45 to be deployed to PT’s and municipalities to perform FM reform functions

•Experts are required to be proficient in several areas of municipal finance and preferably have cross-sectoral experience

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Conclusion:

Successes:

• The success story of the LGTAS is the commitment of municipalities to prepare and implement their MTAS, and in a number of cases, inclusion of its MTAS interventions in the IDPs, thus confirming its commitment to good and accountable local government.

• Willingness of municipalities to improve performance

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Conclusion (Cont.):

Constraints:

• The most serious constraint of the LGTAS has been the failure of national and provincial sector departments to commit to the LGTAS, in the following respects:

• Additional financial support for the implementation of the LGTAS

• Involvement in the IDP processes of municipalities

• New approach towards municipalities as a sphere of government and policies to support this new approach

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Thank you

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Www.salga.org.za 1 Welcome… IMFO Conference 12-14 September 2011 Local Government Turnaround...

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