Speaker of the National Assembly, Honourable Thandi Modise;

The Chairperson of the NCOP, Honourable Amos Masondo;

Your Excellency; President Cyril Ramaphosa;

His Excellency; Deputy President David Mabuza;

Honourable Premiers of our 9 Provinces;

Honourable Members;

Fellow South Africans;

Madame Speaker, on the 5th of December 2020 as a country, we celebrated 20 years of democratic local government. The sphere of government in its own right, that is no longer a function or administrative implementing arm of national or provincial government, has undergone rapid transition and transformation. Great strides were made in moving away from a historical record of racially separated municipalities.

Eight hundred (800) municipalities merged to form the current 297 and currently 257 municipalities which cover all the provinces of the country and focuses on local government development, reaching out to previously neglected areas, economic growth and provision of basic municipal services. There can be no doubt that it has had a profound impact on the lives of ordinary South Africans in expanding the provision of services to our people.

Doom Sayers always negate and trivialise this fact. Even when it periodically gets assessed and reported by StatsSA. But not everyone chooses to close their eyes to these realities. In her Masters Research studies with Cape Peninsula University of Technology, under the title: Leadership Imperatives for Local Government Service Delivery, just across the streets of this august house, Nosicelo Ngqwala affirms “local government has made tremendous progress, commitment and contribution to transform its systems from apartheid inadequacies.

It has created sound structures, and alleviated past inequalities and illegitimate municipal institutions into a liberated and civilised institutions with a clear mandate of developing service delivery strategies that meets the needs of many communities, especially the marginalised groups”.

The problem with history is that it leaves no blank pages. It reminds all of us of even what we want to forget. We have all participated in the struggle for the liberation of our people in their communities. The pertinent question is: on which side were you at? Were you with the marginalised or were you against. Were you on the side of heroes and sheroes like Charlotte Maxeke, Sophie de Bruyn, Peter Mokaba, Beyers Naude who fought tirelessly to achieve a better and dignified life for our people.

Much as a we have seen an increase into access of basic services electricity, water and housing for the marginalised, a number of serious and complex challenges still persist in some municipalities today.

As a result of these challenges Madame Speaker, Local Government has come under a lot of scrutiny. Perhaps necessarily so as this is the most visible sphere of government and closest to the people. Our wall to wall system of municipalities means that all developmental work happens within a municipal ward. In one way or another, nearly all the services our people get or do not get from government find the most concrete expression at a municipal level.

Despite this most pivotal role, local government was the last sphere to be considered and conceptualized during the negotiation period. As such, the development of its policies, systems, practices and funding has tended to lag behind the other two spheres. This is more aptly demonstrated by the still continuing debate on the Powers and Functions of municipalities, the vertical allocation of finances from the fiscus and the continuing refinement of systems and policies affecting this sphere.

Over the past 20 years, various policy, legislative, regulatory and support program measures have been brought about to stabilize local government and to give it its necessary impetus to operate optimally. I can count no less than nine (9) national support measures or interventions which all seem to have yielded limited results from the Municipal Support Program to Project Viability; Project Consolidate, Local Government Turn Around Strategy, Siyenza Manje and Back to Basics.

Where to from here is a fundamental question? How do we improve on what has been done? How do we bring about stability, increase capacity, build institutional resilience, promote good governance, ensure better resourcing and acceleration of service delivery?

Charles Dickens will be of great significance in answering this fundamental questions “Now what I want is facts. Teach these boys and girls nothing but facts. Facts alone are wanted in life”.

I may sound radical and forthright, but I believe we must not miss the opportunity of effecting changes as we heard towards another local government term of 2021-2026.

It is our consistent view, as SALGA, that in dealing with the state of local government and the challenges attendant to, consideration has to be given to political, institutional, and financial aspects as a package instead of wanting to deal with them in isolation.

Madame Speaker, central to these challenges is the elephant in the room – POLITICAL GOVERNANCE MATTERS. Mr President, we fully support your view on the appointment of properly qualified municipal officials to ensure the effective management and provision of services.

We however wish to add that similar focus should be placed on the political arm in a municipality. Every five years, the high turn-over in local government, exacerbated by lack of proper screening of candidates, sets the sector back in terms of leadership, governance and oversight stability. Despite numerous interventions to increase the capacity of Councillors in the first four (4) years of this term of office, the gaps are glaring and the recent developments around COVID-19 have further exposed serious weaknesses in the leadership of many councillors.

As we are gearing towards the 2021 municipal elections, as SALGA we call upon all political parties to prioritise selection of skilled and knowledgeable political candidates instead of trying to manage municipal weakness and dysfunctionalities after deployment. There should be a minimum criteria set for councillors, coupled with the introduction of a performance management and accountability based remuneration regime for councillors. This is a funnel, what you put in is what is what comes out.

Honourable President, we stand firm behind you re-affirming your position that through working with both public and private sector partners, a range of support measures should be directed to the enhancement and development of local economic development units properly staffed with qualified personnel, with abilities to develop municipal economic vision that will enable municipalities to attract business investments.

Business and civil society tends not to be interested in investments if it they believe it will not yield positive results or if they have fears that their efforts will be dampened by corruption. So to address corruption and advance ethical conduct, which we agree Mr President is one of the greatest impediments to the country’s growth and development, SALGA advocates for the introduction of Local Government Service Commissioners to swiftly investigate allegations levelled against Councillors and enforce the Code of Conduct for Councillors. In National and Provincial government, Public Service Commission for example, plays a meaningful role of empowering, investigating, monitoring and evaluating administration. It also evaluates achievements and lack thereof.

Madame Speaker, the lack of accountability in our municipalities is directly linked to poor exercise of effective oversight. Whereas almost all municipalities have established Municipal Public Accounts Committees, they are in most instances under-capacitated, under-resourced, junior councillors are deployed to lead them and most of their oversight recommendations have no binding effect with very little to no follow through or execution.

Central to EXTRACTING ACCOUNTABILITY within our municipalities is to ensure that MPACs are given the necessary authority, including to refer their findings to investigative agencies, table forensic reports or hold the executive leadership of the municipality accountable. They need teeth to bite.

1.Madame Speaker, as it relates to INSTITUTIONAL MATTERS we need to ask if we have the appropriate council structures to achieve the objectives of local government.

2.

3.In our constitutional architecture the governance system for municipalities is fundamentally different from that of national and provincial level. While the national and provincial governments functions in terms of a parliamentary system with a clear separation of powers between the legislature and the executive in functioning, there is a fusion of legislative and executive functions in municipal councils.

In the national and provincial governments there is a considerable degree of distance between the executive and the legislature. Consequently, there is a rather ‘natural’ division of responsibilities; parliament legislates and oversees the executive, which, in turn, is responsible for the implementation of legislative programmes.

In local government, the municipal council is both the legislature and the executive of the municipality. Municipal executives receive their executive authority from the council by delegation, meaning that municipal executives derive their authority, not from the law but from the council. This is a big problem!

Municipal System Amendment Bill is awaiting concurrence by the NCOP where a new clause has been inserted to assist in dealing with prohibiting staff members from holding political office. This will go a long way in dealing with the blurred lines of responsibility between the political and administrative functions.

As SALGA we propose that similar to provincial legislatures, in smaller municipalities a model of clear separation of the legislative from Council’s executive function. For larger municipalities, we can implement the full parliamentary model by removing the executive functions from council and entrusting those to the executive on a permanent rather than a delegated basis.

This is already happening sporadically in a number of municipalities. They are utilising their Section 79 committees to alleviate the problem, but them again they can afford, contrary to smaller municipalities.

Honourable Speaker, SALGA holds the view that central to addressing local government challenges is a REVIEWAL OF THE VERTICAL ALLOCATION OF THE COUNTRYS BUDGET

This view must be seen in the context that over the past 20 years the financial resources available to municipalities have fallen short of the demands on municipalities for services and infrastructure delivery needs and this has been worsening over time.

Although local government is responsible for 46% of the constitutional functions, local government still gets about 9.1% as a sphere from the national fiscus. The current LGES formula, based on a very unrealistic assumption of costs of providing services at a horizontal level, affects the vertical distribution to such an extent that LG is completely underfunded for primarily Basic services but also other components.

In many instances the Cost of providing basic services exceeds the Equitable share. Let it not be that the pleas of the people of Senqu Local Municipality, situated in the deep rural settings of the Eastern Cape are unheard. This is a municipality has a received clean audits for 7 years in a row, yet survives in a meagre allocation of level 3. This system of allocation condemns the poor to more abject poverty. It should further be noted that in some instances consumption of indigents exceeds basic services, particularly in instances of yard connections.

On the same vein, Honourable President, the FINANCIAL HEALTH of our municipalities is declining. The Auditor General confirms that the financial statements show increasing indicators of a collapse in local government finances. He further confirms that the financial woes of local government also weighed heavily on municipal creditors. This means we need sound revenue enhancement strategies. Mr President in light of the realities we are tabling the following low hanging fruits for your consideration:

1. Put together measures to write-off the ever increasing and irrecoverable household debts to municipalities. As it stands now its 193 billion and still growing. We specifically propose the introduction of a national Bill on the repeal of irrecoverable historical debts for in exchange for the installation of prepaid water and electricity metres to prevent re-accumulation of debts. In Sect 71 reports from National Treasury, it confirms that only 35% is realistically collectable;
2. To protect and improve municipal revenue collection we propose the following instruments: –
   1. Amending the Tax Administration Act so that before SARS pays tax refunds, they first check is the particular tax payer does not have monies due to his/her municipality. If the tax payer owes, the amount due to the municipality will be paid first before a refund is deposited to the tax pay account.
   2. Amend schedule 2 section 10 of the Municipal System Act so that it is not only municipal councillors and employees who may not be in arrears with their municipal bills for a period more than three months. This requirement should be extended to all state employees and elected and appointed representatives in other spheres.
   3. In line with DDM, establish a District Revenue Collection Agency. This will achieve better collection efficiencies and will free up municipal personnel to focus on more pressing service deliver efforts.
   4. Amending the Procurement Regulations to make it compulsory for any potential service provider to produce a Municipal Services Rates compliance certificate, prior to being awarded a government contract.

Madam Speaker, we are excited that the policy direction is emerging on what would finally see municipalities to buy power from independent power producers. This will present municipalities with the ability to negotiate cheaper purchase of bulk electricity prices. We do however, caution against the piecemeal approach as amendment of the Electricity Regulation Act are being considered. Municipalities are constitutional executive authorities for the distribution function, yet restricting discussion are going without the involvement of organised municipal labour.

Honourable President, we support the District Development Model with its founding principles espoused from the White Paper of Local Government 1998. District Municipalities are a point of coordination, planning, development and support to local municipalities under its jurisdiction. They were formed to establish and promote a one cost centre of provision of service delivery.

All of the above-suggested measures, complement and fit neatly with the objectives of the new district-based model of development, that seeks to be an integrated, service delivery approach aimed at fast-tracking service delivery and ensure that municipalities are adequately supported and resourced to carry out their mandate. In so doing, local government, through the existing 44 districts and eight metropolitan municipalities, is placed at the epicentre service delivery and development.

DDM will also assist in dealing with the glaring, stubborn Spatial Development and transformation gaps. Our success lies in the introduction of a coordinated response to the spatial legacy which enhances integration across the planning frameworks and across all spheres of government. This could be supplemented with the effective use of the SALGA Spatial Barometer Index Tool to track and measure Spatial Transformation Progress. We sit currently with persistent and unequal spatial realities. We live with them everyday

For City of Johannesburg plush suburbs there is always a reminder we face about the people of Dieplsloot, the underdeveloped Khayelitsha in the city of Cape Town, Khayamandi at the doorstep of Stellenbosch, Mbombela’s economic benefits are a stark contrast to small neighbouring towns. There are many more such examples across the country.

As I conclude Honourable Speaker, the journey of local government over the past 20 to 25 years in South Africa has been AN IMPERFECT TRANSITION. Our history has shown that local government is a complex sphere of government, which requires a proper diagnosis, lest we develop a response that is not appropriate. A suitable response requires a distinction between the occurrences, patterns and trends versus the systemic and structural issues.

We have positively gained from our experiences. We know today that proper delivery of services to our people is dependent on solid and clear systems and processes to detect problems and to determine the type of support that is required by municipalities that cannot perform their responsibilities.

We remain indebted to our forebears who were trailblazers of ensuring that we as municipalities we offer better services to our people.

Honourable Speaker, I thank you for the opportunity.