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Date: 11/09/2003
Source: Portfolio Committee on Provincial and Local Government
Title: Carrim: Debate on Municipal Systems Bill, NA


STATEMENT BY YUNUS CARRIM, CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON PROVINCIAL AND LOCAL GOVERNMENT, DURING DEBATE ON THE MUNICIPAL SYSTEMS BILL, National Assembly, 11 September 2003

The Municipal Systems Amendment Bill deals with consequential amendments flowing from the processing of the Municipal Finance Management Bill by the Portfolio Committee on Finance.

Essentially, the Bill serves to strengthen the governance role of municipalities in respect of municipal entities and the assignment of new powers and functions to local government by national and provincial governments.

Municipalities have long complained that national and provincial governments assign new powers and functions to them without giving them the money to carry these out. The space for these unfunded mandates is now considerably reduced. The full financial implications of these assignments have to be spelt out before they can be effected. And the role of the Financial and Fiscal Commission has been strengthened. The capacity of municipalities to carry out these assignments also have to be assessed at the outset.

To ensure greater municipal control of municipal entities, these entities are now limited to private companies, service utilities and multi-jurisdictional service utilities. However, they can be established not just to provide services but to fulfil other municipal functions as well.

For example, an entity could be established not just to provide water services, but also carry out the function of reading water consumption meters. A municipal entity may also be established to carry out municipal functions that do not necessarily relate to services, such as the provision of information technology support to a municipality. This expanded role is explained in greater detail in our report to parliament carried in Monday's ATC.

Sections of South African Local Government Association (SALGA) initially felt that councillors should serve on the Board of Directors of municipal entities to ensure accountability. But after concerted negotiations with SALGA, a consensus emerged that councillors and officials should be non-participating observers at board meetings and that other provisions ensuring accountability should be strengthened. Our Committee is aware that these provisions may not be adequate and will, in future, in consultation with the Finance Committee, consider a review of these provisions, should it become necessary to do so.

In processing clause 8 of the Bill, the issue of municipal managers remuneration was once again raised. Our Committee has repeatedly called for the Minister to regulate municipal managers remuneration. We realise, however, that this is easier said than done. In the first instance, it may not be constitutionally tenable to do so. Also local government is a specific sphere of government made up of 284 municipalities of three categories and different types, which differ moreover, in terms of population size, budgets, service delivery responsibilities and other respects. We certainly need more information on what precisely managers earn and what their respective responsibilities are.

Of course, municipal managers are not appointed permanently anymore, but on employment contracts of five years. This was a deliberate decision taken by parliament to ensure that municipal managers are productive, effective and accountable. The employment contracts include performance contracts, which set clear performance targets and indicators and often include bonus payments for municipal managers provided they achieve the targets set. So it would not be easy to implement national regulations.

Of course, to attract highly skilled, efficient managers, municipalities often have to compete with high private sector salaries. Often, the municipalities most in need of highly skilled municipal managers are the smaller and rural municipalities who can least afford them. Yet to draw the requisite skills, these municipalities have to offer high salary packages in competition with the financially better-off municipalities.

The Committee is pleased to learn that the report on managers' remuneration commissioned by the Minister is finalised. We have requested the department to present the findings of the report to our Committee within eight weeks.

There were several other issues raised in our processing of this Bill. This will be dealt with by other speakers in this debate. Yet other issues are to be found in our report published in Monday's ATC.

In conclusion, I express our appreciation to the Portfolio Committee on Finance to the extent it was able to co-operate with us. Our thanks also go to Elroy Africa and the rest of the Department of Provincial and Local Government's team, in particular, Petra Bouwer, for his sterling performance, once again. We also convey appreciation to Ismail Momoniat and his National Treasury Team.

Enquiries: Yunus Carrim 082 553 0174
Issued by: Yunus Carrim: Chairperson of Portfolio Committee on Provincial and Local Government
11 September 2003

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