15 March 2011

1. PORTFOLIO COMMITTEE : Report on LGTAS and Delivery Agreement on Outcome 9: 2ND QUARTER (april 2010 – december 2010) 15 March 2011

2. OVERVIEW OF PRESENTATION • Context: the Local Government Turnaround Strategy & Delivery Agreement (and PoA on utcome 9). • Overview of progress from April – December 2011 (2nd Quarter Report) • Strategic recommendations 2011: the Year of Action: Rebuilding Confidence in Local Government

3. Vision for Local Government AResponsive, Accountable, Effective and Efficient Local Government System is defined by: • Municipalities that are delivering on the desired outcomes as set out in the Constitution … • provide democratic and accountable government of local communities; • ensure the provision of services to communities in a sustainable manner; • promote social and economic development; • promote a safe and healthy environment; and • encourage the involvement of communities in the matters of local government. • Municipalities that have the political leadership, organisational capacity and financial resources to fulfill its functions on a sustainable basis. 3 3

4. ALIGNMENT OF LGTAS & DELIVERY AGREEMENT Differentiated approach Single window of coordination Municipal Finance & Administration Access to basic services Community Work Programme Support to Human Settlements Ward Committees

5. PROGRESS: OUTPUT 1: Implement a Differentiated Approach to municipal financing, planning and support • General consensus amongst key stakeholders achieved on need for a differentiated approach. On the development of a Policy Framework for Differentiation, the emerging policy trends regarding differentiation was also identified and will be included in the Review of the Local Government White Paper. • In terms of the Housing Accreditation Support Programme to metro’s and top 21 municipalities, it can be reported that the Department of Human Settlements has given second level of accreditation to the current 6 metros and two districts in NC. • With regards to the filling of critical positions in identified smaller municipalities, it can be reported that a survey and bench marking profile of critical posts have been finalized and presented to the Minister.

6. PROGRESS: OUTPUT 2: improved access to basic services • National access to basic services is: • Water: 93% of total HH access to water • Sanitation: 70% of total HH access to sanitation as at 30 Sept 2010. • Electricity: 82% of total HH access to electricity at 30 Nov 2010. • Refuse Removal: 69% of the total HH access to refuse removal services at 30 June 2010. • The strategy and the business case for the establishment of the Special Purpose Vehicle have been developed and approved by the Minister. National Treasury has agreed to the establishment of the SPV as a government component. • The TOR for development of the Bulk Infrastructure Fund developed. Discussions with NT are ongoing. • Business-adopt-a-municipality: Concept paper and framework drafted. Protocol being developed as intervention to fast track adoption of municipalities.

7. PROGRESS: OUTPUT 3: IMPLEMENTATION OF THE COMMUNITY WORK PROGRAMME • The Community Work Programme scaled up significantly in April 2010 to December 2010: • A total number of 81 412 work opportunities have been created during this period. • Of these work opportunities 10 943 were created during the period September-December 2010. • The programme is implemented in 56 sites spread throughout all the nine provinces across 46 Municipalities covering over 400 wards. 2. A draft Ward-based Cooperatives Programme Concept Document was finalised which links the implementation of the CWP to functional cooperatives. • A MOU between DCoG and SANACO (South African National Apex Tertiary Cooperative) has been signed to assist in the establishment of cooperatives and provide support and training to the existing cooperatives. • Current financial allocation over MTEF unlikely to sustain momentum of job creation in future.

8. PROGRESS: OUTPUT 4: Initiatives supportive of the Human Settlements Outcome • Consultation process was initiated with Departments of Human Settlement and Rural Development and Land Reform regarding densification. Through this process the work has been identified as one of the grey areas in terms of which the Department has a lead role to play. The project will be assigned to the lead/responsible department once the Sustainable human settlement and basic services task team is in place. Terms of references and joint work programme between DCOG, DHS and other critical role players are being finalised. • Terms of references for the establishment of Human Settlement Committees submitted to the DGs of DCoG and DHS and roll-out re establishment of committees will follow. • Re the review of SDF guidelines for cities and large towns within the framework, draft Spatial Development Framework Guidelines for municipalities have been developed.

9. PROGRESS: OUTPUT 4: Initiatives supportive of the Human Settlements Outcome 4. Re the support to the review of land use planning and management within the framework, the National Planning Commission requested comments on the Land Use Management Bill and have requested stakeholders to give comments on the Draft Bill. 5. Re a joint action plan to support the National Upgrading Support Programme (NUSP), it depends on the finalisation of the Land Use Management Bill. The project will be included in the joint work programme between the DHS, DCoG and other role players.

10. PROGRESS: OUTPUT 5: Deepen Democracy through a refined Ward Committee System • Consultations on the draft proposal for ward committees are underway. This work will be incorporated into the work on the Review of the White Paper on Local Government. • Provinces had to adopt provincial frameworks for the determination of out-of-pocket expenses for ward committee members as measures of support for ward committee functionality proofed unacceptable. The majority of Provinces have not adopted these frameworks due to the financial implications to municipalities for its implementation. • NT will be engaged for possible funding mechanisms to give effect to the National and Provincial frameworks for the ward funding model.

11. PROGRESS: OUTPUT 6: Improved municipal financial and administrative capabilities • Workshops on establishment of Municipal Public Accounts Committees (MPAC's) were convened in all provinces. All MPACs have been established in Mpumalanga and Gauteng Provinces. MPACs have not been established in FS, NC, EC and NW provinces. Some muns established MPACs in KZN, WC and LP. • Provinces have developed action plans to address previous audit outcomes and monitored the implementation of the action plans to facilitate improvement of the audit outcomes. • All nine provinces have established Provincial Coordinating Committees and developed provincial action plans for Operation Clean Audit. • Individual or shared Internal Audit Units have been established in 225 municipalities and audit committees in 205 municipalities, but their functionality has not been assessed.

12. PROGRESS: Improved municipal financial and administrative capabilities (Cont) • Re municipal debt, municipal debt and its composition was discussed at a meeting of the Budget Forum on 5 October 2010. Info from the NT about debt will be used to finalise the draft Revenue Enhancement Strategy. It is envisaged that a survey will be conducted to determine the scope of the debt and inform the draft Revenue Enhancement Strategy. • The finalisation and implementation of the Strategy needs to be fast tracked. DCoG will work closely with municipalities to ensure that monies owed by provinces, national departments and SOEs are paid. • Re Improved Human Resource Management and Administrative practises, legislation re the Institutionalisation of HR systems to support recruitment and retention of critical posts reviewed and submitted to Parliament (Mun Systems Amendment Bill).

13. PROGRESS: Improved municipal financial and administrative capabilities (Cont) 9) Re reduced no of municipalities overspending on OPEX: 18% of municipalities according to the 1st quarter section 71 report, are not adhering to this principle of sound financial management as apposed to the baseline of 8% and the target of 4% for 2014. 10) Reduced no of municipalities under spending on CAPEX: 73,1% of municipalities have spent less than 25% of the budgeted amount for capital in first quarter. The target is to reduce the baseline for under expenditure from 63% to 30%. It is accepted though, that a 1st quarter figure for CAPEX will generally not be 25% of the appropriation. 11) Reduced no of muns spending less than 5% on Repairs and Maintenance: Info not available for all muns at present. Problem will only be resolved once there is uniform Mun Standard Chart of Accounts in place. NT currently developing such a Chart and will only be able to provide info in year two (2012/13) of the DA.

14. PROGRESS: OUTPUT 7: SINGLE WINDOW OF COORDINATION • Analysis papers on new Bills and Policies produced and recommendations regarding amendments to legislation that impedes service delivery put forward. Reforms focus on the Municipal Systems Act, The Municipal Property Rates Act, a new bill on Support, Monitoring and Interventions in Provincial and Local Government, the Green Paper on Cooperative Governance and a review of the Equitable Share formula. • Preliminary conceptualisation on the National Capacity Building Framework review and institutionalisation of a coordination mechanism took place. The approach still has to be formalised, however. Extensive consultations had to be held to set up a National Coordination Model to get the buy-in of relevant stakeholders and have not been concluded yet. • Joint work occurred with NT on a revised M&E framework for local government endorsed by MinMEC in Dec 2010.

15. RECOMMENDATIONS MADE TO G&A CABINET COMMITTEE • That work on a differentiated approach to municipal planning, financing and support has been prioritised to receive attention by March 2011. • That the lack of technical capacity, infrastructure funding and operations and maintenance are still major challenges faced by muns re access to basic services. However good progress in the establishment of the SPV which will address some of these challenges. Operationalisation is 1st April 2011. • Discussions with NT are ongoing re the establishment of the Bulk Infrastructure Fund (BIF).

16. RECOMMENDATIONS MADE TO G&A CABINET COMMITTEE • A protocol on conflict of interest is being developed as an intervention to fast track the adoption of municipalities by the private sector and SOEs. • That municipalities and provinces recommit to the MIG & Community Work Programme national targets and requirements. Provinces & municipalities must support the national job creation targets by prioritising labour intensive projects. • Current allocation of financial resources for the CWP unlikely to sustain the momentum of job creation in future. Additional funds to be requested.

17. RECOMMENDATIONS MADE TO G&A CABINET COMMITTEE • A High level Task Team (lead by DCoG & Human Settlements) and a Joint Work Programme between key stakeholders is being finalised to deal with accelerated development of sustainable human settlements and universal access to basic services. • That National Treasury continues to be engaged for possible funding mechanisms to give effect to the National and Provincial frameworks for the ward funding model. j) That provincial COGTA’s will cooperate with and fully support the work of the Inspectorate dealing with Fraud and Corruption in provinces and municipalities.

18. RECOMMENDATIONS MADE TO G&A CABINET COMMITTEE • That the finalisation and implementation of the Revenue Enhancement Strategy will be fast tracked. DCoG will work closely with municipalities to ensure that monies owed by provinces, national departments and SOEs are paid. • That Provinces will particularly assist in monitoring the municipal indicators on OPEX and CAPEX. Provinces to roll-out support programmes on this. m) That approval be sought to only report against the indicator for Operations and Maintenance in year three of the Delivery Agreement Implementation Plan as NT will only be able to provide information in the second year.

19. RECOMMENDATIONS MADE TO G&A CABINET COMMITTEE • That a national consultative workshop will be convened with sector departments and provincial CoGTAs to deliberate on the coordination mechanism and institutional arrangements aligning to the Delivery Agreement and LGTAS processes. • The following on Reporting: • Finalisation of content of Integrated Reporting Template by DCoG on both the indicators for LGTAS and PoA on Outcome 9 will be fast tracked. • For the 2nd progress report indicated in next slide the info be used of the LGTAS reports submitted by provinces in February now (for period Oct to Dec 2010).

20. RECOMMENDATIONS MADE TO G&A CABINET COMMITTEE • That a programme will communicated soon to MECs on plans to revitalise LGTAS across the country that will seize the opportunity of the newly elected councils after the 2011 municipal elections. • That provinces start developing their own plans and initiatives to revilitalise LGTAS and more intensely communicate the successes of the programme.

21. Thank you!