Backlogs in delivery of basic services amount to half a trillion rand – far outstripping his R42 billion budget, Co-operative Governance and Traditional Affairs minister Sicelo Shiceka has said.
Briefing journalists ahead of tabling his budget in parliament on Thursday Shiceka said discussions were underway about establishing a special purpose vehicle to manage municipal infrastructure grant spending on roads, water, electricity distribution, sanitation and other areas.
While details had yet to be finalised, this would ensure that even the poorest municipalities were able to provide quality services. It would also allow for savings through economies of scale, curb corruption bedevilling the procurement of goods and services at local level and make sure the grant funding was spent on what it was intended for.
Currently, the national government has little control over how municipalities spend municipal infrastructure grants once they have been disbursed by National Treasury. Service delivery protests that have flared across the country are in part a response by frustrated communities to the failure of local councils to spend resources properly.
In contrast to bigger, better developed municipalities, those that are weaker and smaller lag ever further behind as funds are either not spent, or used for inflated salaries for officials, or even a new car for the mayor, instead of repairing roads or laying water and sanitation pipelines that communities need. Millions in unspent funds get returned to central government and backlogs grow.
Shiceka said the R495 million figure for backlogs had been arrived at “scientifically” after a study conducted by his department. A detailed breakdown would be released within a few weeks.
Shiceka said the Special Purpose Vehicle was aimed at ensuring “standardisation in the way things are done, not only in terms of cost but also in terms of quality” across all municipalities.
It would work in partnerships both for delivery “as well as financing”. He stressed the motive was financial and not an intention to take powers away from municipalities.
“We don’t have the money to deliver these services at the required scale,” he said. It would allow for resources to be drawn from other departments, such as Water Affairs and Energy, and for them to be used in a much more co-ordinated way.
“Some resources are there, but the way they have been utilised has been within a silo mentality,” he said. This meant they did not achieve the maximum impact.
“It doesn’t mean that if a municipality wants to buy tea it will have to approach central government,” he said. “We are not talking about what municipalities do on a day to day basis.”
He expected discussions to be concluded before the end of the year and if all went well, he hoped the special purpose vehicle would be up and running by April 1 next year.
Municipalities depend on grants for up to 40 percent of their spending, while the bulk of their revenue comes from surcharges on electricity sales. Shiceka is engaged in talks with energy minister Dipuo Peters and National Treasury over shifting municipalities’ dependence on electricity sales to fund their budgets.
Peters has complained that municipalities will not push for energy savings while they depend so heavily on electricity usage for revenue. Shiceka on Thursday said the state of electricity distribution in the country was “a disaster”.
The government decided back in 2007 to set up regional electricity distribution networks, but this stalled in the face of municipal opposition. Shiceka said most of the money generated by electricity distribution was not ploughed back into maintaining and refurbishing the infrastructure used to deliver it.
On troubled relations between municipal employers and labour, Shiceka said a series of engagements with the SA Local Government Association (Salga) would start on Friday. Part of the problem was that many municipalities did not have proper labour forums.
He had also held talks with ratepayers’ associations whose (mostly middle class) members have been withholding rates and paying them into trust funds used to pay for service delivery – chlorine for water treatment works, or repairing potholes – themselves.
“People say this black government in municipalities is not doing well, so we are not participating. We are saying they must come to the party,”Shiceka said.
He said the government was “getting on top of” the service delivery protests.
“We have developed a plan and a strategy on these."
He said that by 2014, there would be no more violent protests. People would still have a right to protest, but he hoped that relations between communities and government would have improved so that they would be peaceful. An overhaul of the ward committee system, currently seen as an enclave of the ANC, would be part of this. Participation would be significantly broadened, he said.
Briefing journalists ahead of tabling his budget in parliament on Thursday Shiceka said discussions were underway about establishing a special purpose vehicle to manage municipal infrastructure grant spending on roads, water, electricity distribution, sanitation and other areas.
While details had yet to be finalised, this would ensure that even the poorest municipalities were able to provide quality services. It would also allow for savings through economies of scale, curb corruption bedevilling the procurement of goods and services at local level and make sure the grant funding was spent on what it was intended for.
Currently, the national government has little control over how municipalities spend municipal infrastructure grants once they have been disbursed by National Treasury. Service delivery protests that have flared across the country are in part a response by frustrated communities to the failure of local councils to spend resources properly.
In contrast to bigger, better developed municipalities, those that are weaker and smaller lag ever further behind as funds are either not spent, or used for inflated salaries for officials, or even a new car for the mayor, instead of repairing roads or laying water and sanitation pipelines that communities need. Millions in unspent funds get returned to central government and backlogs grow.
Shiceka said the R495 million figure for backlogs had been arrived at “scientifically” after a study conducted by his department. A detailed breakdown would be released within a few weeks.
Shiceka said the Special Purpose Vehicle was aimed at ensuring “standardisation in the way things are done, not only in terms of cost but also in terms of quality” across all municipalities.
It would work in partnerships both for delivery “as well as financing”. He stressed the motive was financial and not an intention to take powers away from municipalities.
“We don’t have the money to deliver these services at the required scale,” he said. It would allow for resources to be drawn from other departments, such as Water Affairs and Energy, and for them to be used in a much more co-ordinated way.
“Some resources are there, but the way they have been utilised has been within a silo mentality,” he said. This meant they did not achieve the maximum impact.
“It doesn’t mean that if a municipality wants to buy tea it will have to approach central government,” he said. “We are not talking about what municipalities do on a day to day basis.”
He expected discussions to be concluded before the end of the year and if all went well, he hoped the special purpose vehicle would be up and running by April 1 next year.
Municipalities depend on grants for up to 40 percent of their spending, while the bulk of their revenue comes from surcharges on electricity sales. Shiceka is engaged in talks with energy minister Dipuo Peters and National Treasury over shifting municipalities’ dependence on electricity sales to fund their budgets.
Peters has complained that municipalities will not push for energy savings while they depend so heavily on electricity usage for revenue. Shiceka on Thursday said the state of electricity distribution in the country was “a disaster”.
The government decided back in 2007 to set up regional electricity distribution networks, but this stalled in the face of municipal opposition. Shiceka said most of the money generated by electricity distribution was not ploughed back into maintaining and refurbishing the infrastructure used to deliver it.
On troubled relations between municipal employers and labour, Shiceka said a series of engagements with the SA Local Government Association (Salga) would start on Friday. Part of the problem was that many municipalities did not have proper labour forums.
He had also held talks with ratepayers’ associations whose (mostly middle class) members have been withholding rates and paying them into trust funds used to pay for service delivery – chlorine for water treatment works, or repairing potholes – themselves.
“People say this black government in municipalities is not doing well, so we are not participating. We are saying they must come to the party,”Shiceka said.
He said the government was “getting on top of” the service delivery protests.
“We have developed a plan and a strategy on these."
He said that by 2014, there would be no more violent protests. People would still have a right to protest, but he hoped that relations between communities and government would have improved so that they would be peaceful. An overhaul of the ward committee system, currently seen as an enclave of the ANC, would be part of this. Participation would be significantly broadened, he said.
- Business Report
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