Municipal crackdown

The government is making an extra R9,6-billion available to the provinces this year, but at the same time is cracking the whip on accountability and better service delivery.

A nationally applicable performance assessment system for top municipal officials will be in force by the start of the new municipal financial year, from July 1.

The Department of Provincial and Local Government has started reviewing the powers and functions across the state — the July Cabinet lekgotla will be briefed — and is looking at legislation to give the Intergovernmental Relations Framework teeth to enforce decisions in all three spheres of government.

The department’s Director General Lindiwe Msengana-Ndlela told the Mail & Guardian that while new legislation may not be imminent, the municipal performance assessment system is.

Applicable to the municipal manager and the top 10 ranks of council officials, it aims to close the loopholes that have allowed municipal managers million-rand salaries, and introduces standardised job competencies tailored to rural, urban and metro councils.

“This will bring a little pressure into the system for performance, but will also focus on sustainability,” she said.

There is R82-billion available for local government over the next three years. In the 2006/07 Budget, local government receives R26,5-billion, up from the previous year’s R16,9-billion.

The equitable share allocation rises by R9,6-billion to R22,8-billion by 2008/09.

Effectively, national transfers have increased to 7% of local government finances from the long-standing 4% average.

Many of these increases, alongside hikes in provincial allocations, have been made possible by a 55% increase in the departmental budget, according to official documentation. The department’s budget increased to R24,89-billion from R15,9-billion in 2005/06. Aside from a tiny operational purse, the Budget represents transfers to provinces and councils.

Other significant developments are the end of Project Consolidate by 2008 and R256,2-million allocated to the 16 former cross-boundary municipalities in this year’s Budget.

The money is to cover the transitional phase until processes such as the transfer of assets are finalised. The allocations are earmarked for all these areas including Matatiele, whose residents are challenging the move from KwaZulu-Natal to the Eastern Cape.

“These areas were negatively affected by the fact that they were managed from two centres of power,” Msengana-Ndlela said, adding that the transitional phase to finalise new boundaries could take up to three years.

Project Consolidate has received no Budget allocations beyond 2007/8.

Msengana-Ndlela confirmed this, saying the project to support 136 struggling councils was a short-term intervention. Lessons learnt had to be incorporated into the running of the department. However, an additional R45-million allocation has been made for Project Consolidate.

The Municipal Infrastructure Grant (MIG), a conditional transfer aimed at service infrastructure such as sanitation and water, receives an additional R800-million over three years, boosting it to R21,5-billion by 2008/09.

A total of R1,2-billion, included in the MIG, has been assigned to the eradication of the bucket system and represents the single largest infrastructure allocation from national coffers.

The increases in national allocations to municipalities have been widely described as significant, but the need for capacity remains as local government is meant to deliver free basic services and steer local economic development. However, last year’s countrywide protests highlighted short-comings from the bucket system to water and electricity cut-offs.

A coalition of churches, NGOs and trade unions, known as the People’s Budget, said the Budget promised “real benefits for the poor” as expenditure increases well above inflation. However, it was cautious about local government spending, which would not “adequately compensate” for differences in access to income from rates and services. “Even with higher spending, poor communities do not get the resources they need in order to work their way out of poverty,” they said.

Local government finances are up for review again as taxes come under scrutiny and a zero rating of municipal properties is in the making.

Meanwhile, the provincial slice of the pie has also increased to R176,7-billion this year from national coffers, up from R154,5-billion.

Unlike local government, provinces depend on these national transfers, which make up about 82% of their revenues. Health, welfare and education take up almost three-quarters of provincial expenditure.

Provincial equitable share allocations have risen modestly, by 11,4%, but conditional grants and the allocations tied to specific tasks such as anti-retroviral treatment jump by 34%.

This differentiation comes amid a debate on the status of provinces — which are seen, in some government circles, as an additional layer of bureaucracy — as they continue to underspend, albeit at a rather low level of 0,8%.

Still, provincial rollovers will amount to R1,3-billion this year, predominantly in housing (R384,1-million), provincial infrastructure (R188-million) and the hospital revitalisation programme (R126,9-million), according to Treasury documentation.

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Marianne Merten
Guest Author

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