Shift­ing the bur­den

Doubts whether in­ca­pac­i­tated mu­nic­i­pal­i­ties can take on pro­vin­cial de­liv­ery

Finweek English Edition - - Openers -

FI­NANCE MIN­IS­TER Trevor Manuel and Cab­i­net col­league in charge of hous­ing Lindiwe Sisulu are squar­ing up for bat­tle. Theirs is a fight that goes to the heart of a paralysing catch-22 sit­u­a­tion a pos­si­ble Ja­cob Zuma-led gov­ern­ment would have to beat in or­der to do jus­tice to its core man­date of speed­ing up and ex­pand­ing ser­vices.

The crux of the is­sue is in­sti­tu­tional. The flow of fund­ing be­tween the na­tional, pro­vin­cial and mu­nic­i­pal spheres of gov­ern­ment is sub­jected to bu­reau­cracy and ter­ri­to­rial ten­sions. The out­come is in­ef­fi­ciency, low lev­els of ex­pen­di­ture and slow de­liv­ery.

Gov­ern­ment spokesman Themba Maseko echoes the ir­ri­ta­tion of sev­eral Cab­i­net min­is­ters and direc­tors-gen­eral – es­pe­cially those in charge of ed­u­ca­tion, health and hous­ing. “You find the pri­or­i­ties as set by Gov­ern­ment aren’t be­ing im­ple­mented at pro­vin­cial and lo­cal lev­els. Prov­inces de­ter­mine their own pri­or­i­ties. For in­stance, in hous­ing and ed­u­ca­tion na­tional Gov­ern­ment will say pri­or­i­ties will be on early child­hood de­vel­op­ment or adult ba­sic ed­u­ca­tion. But when it comes to al­lo­ca­tion of re­sources, you find prov­inces would ac­tu­ally iden­tify some­thing else other than those na­tional pri­or­i­ties.”

Manuel plans to get around that by by­pass­ing pro­vin­cial gov­ern­ments and giv­ing hous­ing bud­gets di­rectly to lo­cal mu­nic­i­pal­i­ties. And backed by the Fi­nan­cial and Fis­cal Com­mis­sion (FFC), the Con­sti­tu­tion’s pro­vi­sions for cer­tain func­tions to be de­volved to mu­nic­i­pal­i­ties – plus the Hous­ing Act’s clear re­quire­ment for power to be de­volved down to lo­cal au­thor­i­ties – he’s start­ing with hous­ing. The plan is to even­tu­ally do the same with health, ed­u­ca­tion and so­cial wel­fare.

FFC deputy chair­man Bon­gani Khu­malo says: “We think this is the best way to avoid a sit­u­a­tion where hous­ing de­vel­op­ments are built without pro­vi­sion be­ing made for roads, schools and other com­mu­nity fa­cil­i­ties.”

Clive Kee­gan, of the Lo­cal Gov­ern­ment Re­search Cen­tre, says de­volv­ing hous­ing down to lo­cal gov­ern­ment is “ab­so­lutely es­sen­tial” and log­i­cal, in that mu­nic­i­pal­i­ties con­trol com­ple­men­tary in­fra­struc­ture – elec­tric­ity, san­i­ta­tion, wa­ter and most land – nec­es­sary for sus­tain­able hous­ing pro­grammes. Giv­ing lo­cal au­thor­i­ties exclusive power over the de­liv­ery of hous­ing would surely mean a sharper, more ef­fi­cient sys­tem?

Sisulu doesn’t dis­pute that. Even though she’s the first to ad­mit the pro­vin­cial tier of gov­ern­ment is a frus­trat­ing ob­struc­tion, she’s told Manuel she’ll fight him on his pro­posal to Cab­i­net to by­pass prov­inces.

The ques­tion is, why? Es­pe­cially given that Sisulu in­tro­duced a sys­tem in 2005 that al­lows mu­nic­i­pal­i­ties to ap­ply for and then be­gin the process of qual­i­fy­ing for of­fi­cial ac­cred­i­ta­tion as a hous­ing provider. She’s adamant that un­til mu­nic­i­pal­i­ties are ac­cred­ited they can’t be handed that kind of re­spon­si­bil­ity. Nearly four years af­ter the ac­cred­i­ta­tion sys­tem was in­tro­duced only 18 of SA’s 283 mu­nic­i­pal­i­ties have ap­plied for ac­cred­i­ta­tion – and none have qual­i­fied for it so far.

As au­di­tor gen­eral Ter­ence Nombe­mbe con­firms, the over- all mu­nic­i­pal pic­ture is bleak – es­pe­cially when it comes to the crit­i­cal is­sues of in­ter­nal con­trols, doc­u­men­ta­tion to sup­port fi­nan­cial state­ments, ca­pac­ity and skills. Nombe­mbe’s re­port – com­piled for a re­cent road show to all nine prov­inces – shows that more than 60% of mu­nic­i­pal­i­ties can’t ac­count for the rev­enue they re­ceive. That means they’re un­able to show how and when fi­nan­cial trans­fers from Gov­ern­ment took place and can’t pro­vide proof of where the amounts listed in their fi­nan­cial state­ments come from. “More than 50% can’t ac­count for the bulk of their ex­pen­di­ture, so their fi­nan­cial state­ments can’t be trusted.”

Sisulu’s plea is to do it right: to give mu­nic­i­pal­i­ties re­spon­si­bil­ity as they qual­ify for it. So far 11 mu­nic­i­pal­i­ties have reached Level 8 of the ac­cred­i­ta­tion process and ap­pear to be bat­tling to get to the ninth and last level.

The FFC sup­ports Trea­sury when it comes to ar­gu­ing the ac­cred­i­ta­tion process is go­ing nowhere slowly. Is says mu­nic­i­pal­i­ties need to be given the pow­ers to pro­vide hous­ing and that na­tional and pro­vin­cial gov­ern­ment need to go all out to make sure they have the ca­pac­ity and skills to man­age the process prop­erly.

Above: Plans to by­pass pro­vin­cial gov­ern­ments. Trevor Manuel Right: Ready to fight Manuel’s pro­posal. Lindiwe Sisulu

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