Critics say last year’s amendments to the Municipal Structures Act will cause massive upheavals with few benefits Drew Forrest Two studies commissioned by Minister of Local Government Sydney Mufamadi have added fuel to a fierce controversy over the future shape of local government in South Africa. Government sources disclosed that a commission appointed by Mufamadi and headed by former opposition politician Peter Leon has called for the scrapping of a controversial amendment to the Municipal Structures Act, which shifts core delivery functions water, electricity, waste disposal and health services from local (town) to district councils. Critics say the amendment, rushed through Parliament before last year’s local elections, will cause massive upheavals at local level with minimal benefits. South Africa’s 47 districts cover large areas and include 230-odd local councils within their boundaries. Another study commissioned by Mufamadi, conducted by local government consultancy the Palmer Development Group, is also understood to question the feasibility of the amendment. The national treasury is known to be implacably opposed to the change, which is due to take formal effect in December this year. Finance officials fear the measure ostensibly designed to empower district councils to redistribute municipal resources will undermine the revenue base and long-established delivery capacity of towns like East London and Pietermaritzburg.
They see Demarcation Board chief Mike Sutcliffe as the policy’s principal architect, aided by the chairperson of Parliament’s local government committee, Yunus Carrim. They complain that the Department of Finance first became aware of the amendment when it was gazetted. Sources say Mufamadi is worried by the possible implications of the legislation, but faces a strong lobby within the African National Congress, which believes district councils must crack the whip over town councils and play a redistributive role. He must decide whether to reverse the legislation, in consultation with the health, water and energy ministers on an inter-ministerial task team deliberating on the powers and functions of local government. Sources said the district-local issue was also tied up with debate in the ANC on the future of the provinces, with some members arguing that powers should be devolved from provincial to district government. Sutcliffe hit back this week, saying that ”a group of white reactionaries” were trying to maintain a status quo in which local councils only serviced small numbers of black residents on their immediate doorsteps. ”Theirs is an ideological argument,” Sutcliffe said. ”They want an incremental approach to a non-racial South Africa.” It was not accurate to say the amendment sought to empower districts at the expense of local councils, he said. Carrim said he was ”astonished” that the Leon commission had not interviewed him or the chairperson of the National Council of Provinces’ local government committee, Mohammed Bhabha. He strongly denied driving the legislation, saying it had reached his committee ”in the normal way via the minister, who cleared it through Cabinet, and the department”. He said that based on 18 months’ of work by the Demarcation Board, the amendment had the support of a wide range of local government actors, including other affected ministries and the South African Local Government Association. Carrim said he believed there was a need for strong district councils ”to ensure appropriate redistribution and capacity-building among local municipalities”. However this was envisaged as happening ”in a balanced, temperate way” over a 10 to 15-year period, so that town economies would not be jeopardised. ”If we find that the law is impractical, we’ll obviously consider a review,” he said. ”But this must involve a significant range of stakeholders.” Leon said he could not comment on his commission’s report until it was released, which is expected to happen shortly. However, it is understood to call for a return to the status quo ante, where district councils played a broad coordinating role and provided bulk services rather than retailing them to residents. Leon’s report is understood to argue that: Without service revenue, already hard-pressed towns will be crippled. The amendment effectively creates four tiers of government national, provincial, district and local which South Africa cannot afford. It is international practice for national, rather than local, government to redistribute resources. The amendment may breach the constitutional requirement that the finance and fiscal commission be consulted on changes with fiscal implications. Neither the Constitution nor the 1998 local government White Paper envisage districts with service retailing powers. Other critics said the shift implied the transfer not just of powers and functions, but of staff, infrastructure, assets, liabilities and records. The fundamental issue, they said, was whether South Africa needed district municipalities at all, and what purpose was served by having two overlapping tiers of local government.