EDITORIAL: Action needed to fix local government

The crisis in local government is well known, especially to citizens who suffer from a lack of service delivery ranging from sewage overflows, a lack of water provision and refuse collection, and poor infrastructure, to name but a few of the many problems they face. 

So the initiative by the department of co-operative governance & traditional affairs to launch a discussion on what needs to be done to fix this corruption-ridden and poorly governed sphere of government in all its problematic aspects is to be welcomed. The discussion forms part of a review of the 1998 White Paper on local government.

Importantly, it will involve a relook at the funding model for local government and the formula for determining its equitable share of national revenue. The SA Local Government Association has long complained that the 9%-10% of national revenue local government receives (R177bn in 2025/26) poorly reflects the cost of its responsibility for 46% of constitutional functions. 

But the quantum of funds is only part of the problem. Also critical is how these finances are managed with local government plagued by persistent internal control and financial governance weaknesses. This is reflected in that about R18bn in unspent funds has been returned to the fiscus over the past five years despite the critical needs and lack of investment in infrastructure. 

Various initiatives are under way to address the crisis. Operation Vulindlela, a joint initiative of the presidency and National Treasury, is tackling it. Proposals have been made to ring-fence funds for specific purposes, and the Treasury is rethinking the support it gives to municipalities to focus more on organisational capability rather than only individual capacity. 

The refreshingly honest discussion document asks why previous discussions on local government finance have seemingly produced “indifferent and uneven results”, so we can only hope that the latest initiative goes further in addressing the crisis it faces.