MTHOBELI KOLISA: Talk is no good — solid plans needed to solve service delivery saga

A scan of the manifestos of political parties campaigning for the May 29 national and provincial election suggests most parties are concerned about service delivery. But what seems to be lacking is concrete plans to resolve the issues that affect the functionality of local government.

Local government, like state-owned entities (SOEs) and departments such as health, police, education and social welfare, are among the institutions that have the most effect in the daily lives of many South Africans.

In fact, compared to each of these SOEs and departments municipalities are institutions that have greater significance in daily service delivery experiences of citizens simply because they are responsible for a basket of services that affect citizens and the economy on a daily basis, as opposed to just one service per institution.

Of the 83 functions allocated to all three spheres of government in schedules 4 and 5 of the constitution, 40% are functional areas of concurrent national and provincial legislative competence, while 14% are functional areas of exclusive provincial legislative competence. The remaining 46% are local government matters over which municipalities have executive authority and the right to administer.

In addition to these, some of the functions or key elements of the functions of national and provincial governments are assigned to municipalities via various sector legislations passed by parliament after the adoption of the constitution. This category includes key elements of critical functions such as disaster management, environmental management and community safety.

It therefore goes without saying that SA can never achieve a better and more prosperous life without functional local government. Yet most municipalities are facing crippling financial and service delivery challenges. Voters should therefore be concerned if political parties that are contesting elections do not have concrete plans to turn local government around.

Among many areas that can be considered for such plans funding and leadership are the key areas that need urgent attention. In the area of funding, the SA Local Government Association (Salga) has long argued that local government is not equitably funded given its functions. With almost half of the functions of government being its responsibility, local government is allocated just about 10% of the fiscal allocation and municipalities must collect the rest themselves through services charges and property rates.

Salga recently commissioned an independent study that concluded local government is indeed underfunded by R58bn-R150bn a year. While poor governance and financial management are often blamed for the municipal financial crisis, they should not prevent an objective analysis of whether local government is actually adequately funded for the functions it is mandated to fulfil.

To close this funding gap the vertical division of allocations between the three spheres of government needs to be adjusted in such a way that the local government allocation increases from the current 10% to 13.5%-18.8% of nationally raised revenue to enable local government to fulfil its mandate.

This may appear to be an insignificant adjustment. But it in fact represents increases of 33%-84% of the current fiscal transfers to local government. Put differently, municipalities are underfunded by 33%-84% of the funding they need to perform their functions.

This is important because the expenditure of municipalities is linked to, and by, the revenue ceiling, since they cannot spend money they do not have. Municipalities therefore spend far less on providing and maintaining infrastructure services than they should be doing, given the population and the geographical spread of the areas in which the infrastructure must be laid.

This constrained maintenance and refurbishment expenditure leads to a decline in the state of infrastructure even though a lot has been achieved in extending infrastructure access on key basic services that are the responsibility of municipalities since 1994, as reflected in the recent census.

Political parties contesting the upcoming elections need to indicate if they intend to adjust the vertical division of the fiscal allocation among the three spheres of government to increase the local government allocation. This will require improvement in efficiencies in national and provincial government departments.

There are sectors where this inequitable allocation of financial resources among the three spheres of government is evident and irrational. One example is the roads function. Municipalities are in effect responsible for about 60% of the country’s 750,000km of the road network. Yet they are allocated only about 11% of the national fiscus allocation to the roads function.

National government, through the SA National Roads Agency, is responsible for about 4% of the network and gets about 37% of the national fiscus allocation to the roads function. Provinces are responsible for 36% of the road network and are allocated 52% of the national fiscus allocation to the roads function.

It is expected that municipalities must fund the roads function almost entirely from locally raised revenue in the form of property rates. To make things worse, properties in rural areas are generally not rateable, and by law cannot be charged property rates. This means municipalities that are predominantly rural do not have a funding source for the rural road network. They have to use the limited property rates revenue from small towns to fund construction and maintenance of vast rural gravel roads networks that get damaged every rainy season.

No wonder the roads in many small towns and rural areas are in extremely poor condition. The socioeconomic conditions of these municipal areas can never improve without proper roads.

Another other example is healthcare. Most of the country’s health budget is allocated to curative health, a limited amount to preventive health in the form of immunisation, and almost nothing to preventive health services that prevent the occurrence and spread of communicable and lifestyle diseases, also known as the environmental health function. This is a function that is assigned to municipalities, and they are expected to fund it almost entirely from limited locally raised revenues. Parties that are campaigning to get into provincial and national government need to be clear about how they are to address this funding challenge.

The other challenge is that of the quality of leadership in municipal councils. In respect of leadership, most parties deploy their best leaders to national and provincial parliaments, sometimes as backbenchers with limited influence, instead of deploying them to local government where there is a need for astute leaders to lead municipalities face the complexities of governance, financial and service delivery sustainability challenges.

Municipalities need leaders who must work with communities so they may understand and accept that under the constrained environment as outlined above there must be prioritisation of only the most critical expenditure requirements and ensure that administrations are prudent with such expenditure.

Parties need to tell voters who of their best leaders from national and provincial executive committees they intend deploying to lead municipalities. Have their list processes considered the urgent need to deploy the best to fix local government?     

• Kolisa is chief officer for infrastructure delivery, spatial transformation & sustainability, and acting CEO at the SA Local Government Association.