Overview of Presentation

1. Water Sector Leadership GroupMeetingRiviera Hotel, Vaal RiverThe CGTA Policy ReviewMs Sheila HughesActing Executive manager, IGR17 June, 2009

2. Overview of Presentation • The Policy Review: a context for change • The mandate of the new dept: COGTA • Key proposals for change • A differentiated municipal classification system • CGTA Strategic priorities: Policy Review • Role-players: sectors and intergovernmental development planning

3. The Policy Review and the context for change • The Strategy and Tactics document adopted by the 52nd National Conference in Polokwane 2007: The third attribute should be the state's organisational capacity: ensuring that its structures and systems facilitate realisation of a set agenda. Thus, issues of macro-organisation of the state will continue to receive attention. These include permutations among policy and implementation organs within each sphere, allocation of responsibilities across the spheres, effective inter-governmental relations and stability of the management system’. • ANC Election Manifesto 2009: ‘effective government characterised by improved coordination and planning is a prerequisite for effective service delivery’. • The Developmental State: defining how the state further addresses the remaining challenges of unemployment, growing inequalities and underdevelopment and the growth paths it will follow. • ‘Key to implementing government policy is a developmental state with a strong planning capacity and the ability to intervene in strategic areas...an effective system of ongoing coordination, monitoring and evaluation of the implementation of government programmes and projects(President of the ANC, January 2009).

4. The mandate of the new dept: COGTA The new department of cooperative Government and Traditional Affairs will work to reinforce and deliver on this focus: • ‘there will now be an expanded shift and more deliberate mandate on matters of cooperative governance’. • ‘the implementation of government programmes in many areas continues to be fragmented, disjointed and uncoordinated’. • ‘In the area of oversight, this government has major lessons to learn. It is our view that one of the crucial weaknesses of our young intergovernmental relations system is that it is largely based on voluntarism and good will. Greater attention will need to be given to the implementation of the Intergovernmental Relations Framework Act and also sharpening our existing tools and instruments to ensure greater compliance and better performance’. (Minister Sicelo Shiceka, SONA debate address) Key CGTA new strategic priorities include: Build the Developmental State in Provincial and Local Government that is Efficient, effective and Responsive • 2 Key focus areas: Development Planning and Facilitation • Building Coherent Government and IGR through the Targeted Reform of Provincial and Local Government

5. Key proposals for change The Policy Review of Provincial and Local Government: Reconfiguring the system of provincial and local government: Proposing and setting business cases for: • The role of Provinces – to be no longer only defined by the Constitution • Provide comprehensive legislative framework on provincial government clarifying the mandate and role of this sphere: including: • A framework for establishing provincial departmental portfolios • Defining functional responsibilities of provincial government • Defining national government’s responsibility for oversight, intervention and support • Defining concurrency in the context of provincial service delivery, planning and development • Providing for provincial government’s reporting responsibilities to national government • Regulating provinces’ support, monitoring and intervention roles in respect of local government.

6. Key proposals for change National legislation on powers and functions: bring stability and coherenceinto the system • No clear framework for centralization/decentralization, no robust and methodical procedures for managing devolution • Too many triggers for unmanaged functional changes between spheres • Functions often adjusted outside of a clear policy framework; capacity assessments? • Many municipalities not performing their functional responsibilities effectively • Some municipalities perform exclusive provincial functions (e.g. libraries) for years • Sector reform needs a coherent scheme for devolution: some sectors devolve to municipalities (transport); others provincialise (health and housing); others look for enhanced national authority (electricity, water) • Impact: confused and uncertain lines of authority; accountability gaps between spheres; unfunded mandates; intergovernmental disputes - Poorly defined functional areas weaken public accountability and contribute to service delivery failures and intergovernmental conflict.

7. Key proposals for change Reform of the two-tier system: reduce, reconfigure or abolish • Many municipalities still lack the capacity to discharge their developmental mandate • No income: almost half of the 46 districts are entirely funded by national transfers; no redistribution role • Audit outcomes are poor: according to Auditor-General Reports poor financial management and poor controls are key factors in the high number of disclaimers and adverse opinions • Districts have consistently performed few of their S84 functions and provide little or no real support to locals; they are also resented by many stronger locals and metros who do not want/ need their support • There are few strong district governments with notable high performance or development impact regionally • There is no evidence that the process of adjusting functions between locals and districts result in improvements in performance in either entity • Coherent government demands that the system is simplified requiring new / amended legislation and new administrative forms Legislative reviews of local government and new assignment frameworks may be considered every five years, linked to the term of office of national government. This would allow for monitoring and evaluation of how the differentiated functions are being performed by local government and whether any adjustments are necessary.

8. A differentiated municipal classification system Background: • Development of spatial focus to inform development of new municipal typologies through sets of indicators • Indicators developed and results weighted and ranked: socio-economic, service delivery, functions performed • District / Local analysis of functionality, capacity and regional socio-economic trends undertaken • Assessment of spatial relationships: location of worst and best performing municipalities • Relationship of assessments to Policy Review: informing new policy / legislation on powers and functions according to municipal type (quartiles 1-4: classification1: poorest performing: classification 4: best performing) • Process of differentiation emerging – asymmetrical versus ‘one size fits all’ • Two-tier system revealed as largely unnecessary; reform to be informed by spatial location of poorest performing municipalities regarding alternative support mechanisms (technical service hubs) • Possibilities of re-demarcation: non-viable, barely functional municipalities • No poorly performing district or local to be entrusted with WSA responsibilities or other complex functions • Movement between categories to form part of M&E system: 5 yearly option.

9. Municipal Classification System Classification 1: Local Municipalities: 57 Table showing the location of the classification 1 municipalities by Province

10. Municipal Classification System Class1 status: EC: 3 Free State: 1 KZN: 4 Limpopo 4 Classification 1: Districts: 12 • Profile: many of the DMs and LMs located in former bantustans: • Median poverty levels 72%: (out of 80) • Median unemployment levels: 72% (out of 76) • Median urbanisation: 10% (out of 50) • Functions performed with some capacity: 65% (out of 120) • Water backlog: 34% (out of 40) (Districts only have 14 functions)

11. Functions Class 1: LMs Municipalities which fall within the 1st quartile or 25th percentile demonstrate the poorest socio economic conditions, the lowest municipal capacity levels and the highest service level backlogs. Some municipalities are entirely comprised of rural households with no towns or urban infrastructure. Functions which are imperative for ensuring public health and safety should be rendered by a more competent or resourced level or sphere of government. This would at least include removing the following functions: • Water • Sanitation • Municipal health services including all related schedule 4 Part B and Schedule 5 part B functions • Electricity Moreover, classification 1 local municipalities should be precluded from rendering functions which are generally poorly performed nationally or are more suited to well developed urban areas such as: • Billboards • Licensing of dogs • Municipal airports etc. Functions which require middle management capacity but offer opportunities for employing low skilled staff should be retained by the classification 1 local municipalities. These functions would include the following: • Municipal roads • Refuse removal • Storm water management • Parks and recreation • Cleansing. Should municipal planning function be retained – local democracy issue?

12. Municipal Classification System Table showing percentage of District Municipalities Authorised for Trading Services Classification 1: Districts Eastern Cape: 18 class: 1 LMs: 3 DMs KZN: 24 class 1 LMs: 4 DMs Limpopo: 13 class 1: LMs: 4 DMs North West: 2 class 1 LMs: No DMs

13. Municipal Classification System Classification 4: 58 local municipalities EC: 7 Free State: 2 Gauteng: 7 KZN 4 Limpopo: 2 Mpumalanga: 6 NC: 7 NW: 2 WC: 21 • Profile: • Highly urbanised (76%) communities (80% of the LMs in Gauteng and WC in this quartile) • Large urban centres; mining towns; semi desert areas • median poverty level: 28% (out of 60) (but huge variables) • Median unemployment 46% (out of 70) • Authorised functions with some capacity: median 69% (out of 80) • Water backlog: 2.5% (out of 20) (Local functions: 36)

14. Municipal Classification System Classification 4: Districts: 12 EC: 1 FS: 1 Gauteng: 2 NC: 3 WC: 5 • Profile: • Poverty levels: 30% (out of 60) • Unemployment: 51% (out of 70) • Urbanisation: 78% (out of 90) • Authorised Functions performed with some capacity: median 141% (out of 160%) • Water backlog: median 3% (out of 18) Classification 4 districts are highly performing, but are they necessary? Wouldn’t their skills be better dispersed into poorly-performing areas?

15. Functions for Class 4 The classification 4 municipalities are the most resourced group at the local level. The municipal capacity levels and socio economic status are significantly higher than the national average while service backlog levels are lower. These municipalities should have sufficient capacity to perform all the schedule 4 part B and schedule 5 part B functions with routine monitoring by provincial and national government. In addition, the following functions could be assigned or delegated from provincial government to the local level: • Primary health care • Libraries • Vehicle registration and licensing • Housing • Early Childhood Development • Disaster Management.

16. CGTA: Strategic Priority 1: Build the Developmental State in Provincial and Local Government that is efficient, effective and responsive

17. Role-Players: Sectors and Intergovernmental development planning • Sectors familiar with cross-cutting diffusion of roles and responsibilities – concurrency, devolution, specialist agencies and authorities etc. • Water Affairs: strengths: Award winning Masibambane programme; coordinated SWAP and NWSP; IGR • Water Affairs: complexities: limited Minmec coordination and political leadership; no official provincial role (PGDS & PWSPs); regional / municipal relations; accountability: monitoring and reporting • CGTA role: Water Service Development Plan; Municipal Partnerships; MIG; (other: NT; Housing, Environment, Health, Agriculture – can include provincial ‘client’ departments) • Highly variable capability at local level to implement SFWS, coordinate programmes; undertake S78 assessments; manage intergovernmental relations • Coordinated planning and collaboration have moved centre-stage – NPC: CGTA; M&E and new governance approaches SECTOR COLLABORATION ON NEW POLICY AGREEMENTS IS CRITICAL

18. THANK YOU!