SECTION B

CO-OPERATIVE GOVERNMENT

1. LOCAL GOVERNMENT IN A FRAMEWORK OF INTER-GOVERNMENTAL RELATIONS

Co-operative relations between spheres of government
The South African constitutional order is founded on two inter-related concepts: 'sphere of government' and 'co-operative government'.

Definition of "sphere of government" 'Sphere of government' captures the idea that national, provincial and local government are each distinctive and have equal status. This is an important change from the previous order, where "levels" of government were arranged in an hierarchical order, with the national level on top, and the local level at the bottom. In the new system, the Constitution grants each sphere of government the powers to define and express its own unique character.
Definition of "co-operative government" 'Co-operative government', however, means that, although each sphere is distinctive and has equal status, the spheres are also inter-dependent within the overall structure of the state. The three spheres must work together to ensure effective government in the whole and each of its parts. Co-operative government recognises the complex nature of government in modern society. No country today can effectively meet its challenges unless the various parts of government:
  • co-ordinate their activities to avoid wasteful competition and costly duplication
  • develop a multi-sectoral perspective on the interests of the country as a whole, and respect the discipline of national goals, policies and operating principles
  • settle disputes constructively without resorting to costly and time-consuming litigation
  • collectively harness all public resources within a framework of mutual support
  • rationally and clearly divide between them the roles and responsibilities of government, so as to minimise confusion and maximise effectiveness.
  

System of intergov-ernmental relations

System of intergovernmental relations as it relates to local government
A system of intergovernmental relations is emerging to give expression to this concept of co-operative government. Within this system, each sphere of government has been given clear responsibilities in relation to each other. These are as follows:
 

Responsibilities

National government:
  • Must support and strengthen local government
  • Needs to establish an adequate legal framework within which local government operates
  • Needs to establish the different types of municipality that a province may establish, as well as the criteria (rules and conditions) according to which the different categories are to be established, and
  • Must pass legislation on and determine the local government's 'equitable share of revenue raised nationally', as well as a range of other fiscal matters such as municipal budgeting.
Responsibilities Provincial government:
  • Must support and supervise local government's proper functioning, and must monitor the ongoing performance of municipalities
  • Must pass legislation to determine the different types of municipality to be established in each province, in according with criteria set by national legislation
  • Needs to intervene when a municipality does not fulfil its functions, and
  • Can regulate and legislate aspects of the functioning of local government in each province.
Responsibilities Local government:
  • As a sphere is neither independent and autonomous from, nor sub-ordinate to, national and provincial government. It needs to maintain open, co-operative and constructive relations with both provincial and national government, operating as one component of the broader state structure
  • Can maintain direct relations with both provincial and national government. This means that local government's relations with national government do not need to go through provincial government (for example, local government can be directly represented on the Financial and Fiscal Commission and the National Council of Provinces), and
  • Needs to participate in national and provincial development programmes such as the spatial development initiatives (SDIs) and provincial growth and development plans.
Spheres in support of each other This list of responsibilities says that national and provincial government are constitutionally required to take an active interest in ensuring the development of strong local government, capable of fulfilling its constitutional mandate. In return, municipalities are required to ensure the effectiveness of provincial and national government in their respective areas of jurisdiction.

What does co-operative governance mean practically for local government?

Powers and functions to LG Decentralisation and the assignment of powers
National and provincial government are constitutionally permitted to devolve (hand on) powers and functions to local government. At present, several national departments are in the process of decentralising functions to local government. These functions include housing, safety and security, health and transport.
Problem of "unfunded mandates" While decentralisation is often desirable to improve the effectiveness of government as a whole, it is not without problems. The devolution of a new function to local government may occur without it being accompanied by the financial and administrative capacity required to sustain it what is called "unfunded mandates". Unfunded mandates strain local government's limited resources and, ultimately, result in a lack of delivery.
Funds to support additional functions Any decentralisation of responsibilities therefore needs to be carefully managed with national and provincial government following clear procedures. National government is committed to avoiding unfunded mandates, and to providing a basic minimum of funding to support any additional local government responsibilities. The definition of a basic minimum of funding is yet to be clarified. Criteria could be set by the FFC taking into account such factors as the standard of service to be provided, increase in demand due to population growth, and so forth.
Procedures for transfer of powers In addition, clear procedures for the transfer of powers as well as a system of performance monitoring of assigned functions, could be developed.
 

Rationalisation and co-ordination of fiscal flows, service boundaries and public investments

Funds channelled to institutions other than LG Many national and provincial departments allocate funds to the local sphere. However, much of this funding is channelled to local institutions other than local government, for example, to local offices of national and provincial departments. These fiscal flows often cover both operational and capital funding.
Funds channelled directly though LG If national and provincial departments commit themselves to working through local government directly, substantial resources could be made available to local government to conduct their constitutionally assigned powers and functions. Depending on the nature of the funding, it may contribute significantly to local government institutional development, as well as general development and delivery programmes. This will be particularly beneficial for rural municipalities.
Overlapping functions and boundaries make integrated planning difficult Municipalities today find themselves working in parallel with a range of local institutions. Several departments have established local institutions which bypass local government. Their boundaries (on maps) do not always match each other, or municipal boundaries. Because these initiatives are sector-based (for example, water, housing, public works), integrated development planning in the local sphere becomes difficult to carry out (because each sector tends to look primarily at its own area of concern not at the overall picture).
Parallel structures can undermine LG Parallel structures may also undermine the authority of local government to govern in those areas over which it has constitutional jursidiction. If local government is to govern effectively and play an integrating, co-ordinating role locally, some of these structures may need to be brought under local government authority.
Co-ordination of national, provincial and local programmes Municipalities are expected to develop local infrastructure investment plans on the basis of integrated development plans. However, national and provincial departments have major infrastructure programmes of their own, which are not always executed with the active and informed participation of municipalities. Some of these national and provincial investments may impose unforeseen future costs on municipalities. Integrated planning is needed to co-ordinate national, provincial and local investments in municipalities' areas of jurisdiction, to ensure that scarce resources are utilised for maximum impact.

 


Monitoring capacity and support needs

Monitoring and capacity building of local government by national and provincial departments
Monitoring involves the design and application of national and provincial systems for observing, detecting and recording the operation of a municipality. Such systems are needed to determine what capacity must be built and what kind of support or intervention is required. Some monitoring systems are already in place, such as Project Viability in the Department of Constitutional Development. These will be expanded and improved over time. However, additional systems, in particular performance enhancement systems in provinces, are required.
Capacity building programmes The devolution of functions to local government should be accompanied by nationally co-ordinated capacity building programmes. This could include training, institutional development, staff secondment, and so forth. Some national departments are considering capacity building initiatives for local government at present. This is encouraged, provided that such efforts are in line with the broader local government training system.
National and provincial govt can intervene to ensure adequate performance of LG Intervention
The Constitution provides that a provincial executive may intervene, in certain circumstances and under certain conditions, in local government. Although the distinct nature and integrity of the local government sphere must be respected, other spheres of government must reserve the right to impose sanctions where municipalities do not perform adequately, and to retain mechanisms for direct assistance in the carrying out of local government functions if municipalities cannot fulfil their mandate. These powers should be seen as a measure of last resort, where the particular difficulty cannot be resolved through ordinary intergovernmental processes.
Procedures for intervention National government is committed to building local government to ensure that interventions are exceptional and not regular occurrences. If intervention does occur, it must follow clear and uncumbersome procedures. National legislation may regulate the intervention process. Such legislation may also establish alternative forms of intervention to those provided for in the Constitution, such as the power to request another municipality to assume responsibility for an obligation which has not been adequately fulfilled.

  2. ORGANISED LOCAL GOVERNMENT
Municipal associations The Constitution allows for municipalities to organise forms of municipal association.

A national organisation, the South African Association of Local Government, and nine provincial associations have been established.

LG representation Organised local government has a mandate to represent local government on a range of intergovernmental bodies and in a range of processes, including:
  • On the National Council of Provinces
  • In the drafting of legislation in all spheres (of government) that affects the status, institutions, powers and functions of municipalities, and
  • On the Fiscal and Financial Commission, and in the drafting of the legislation that provides for the equitable division of revenue raised nationally.
Effective representation requires skills and capacity For organised local government to effectively represent municipalities, a decision making system must be developed to allow for thorough consultation and for building consensus (broad agreement). Organised local government must be supported by the necessary skills in areas such as policy analysis, policy development, advocacy, lobbying, negotiation, mediation and conflict resolution.
Employers' organisation Organised local government in South Africa is also an employers' organisation in terms of the Labour Relations Act of 1995. It represents municipal employers in appropriate bargaining structures on matters of remuneration, conditions of service and so forth. As an employers' organisation, organised local government needs considerable expertise in bargaining, conflict resolution and human resource management and development.
Organised LG can provide services to strengthen municipalities In other countries, organised local government does not only represent municipalities. It also provides specialised services to supplement and to strengthen the capacity of municipalities. Municipalities pool some resources to support research, information and organisational assistance activities such as: information exchange; publication of bench-marks (for measuring and evaluating performance) in areas such as expenditure, income and delivery; training, consultancy, organisation development, advice and brokering. These mechanisms could contribute considerably to strengthening South African municipalities.
Additional funding required Organised local government is primarily funded by and dependent on membership fees payable by municipalities. This keeps local government associations accountable to the municipalities that constitute them. However, the functions performed by organised local government require wide-ranging, high level and specialised human resources. For organised local government to be effective, additional sources of funding will need to be accessed. Funding of organised local government and of the equitable share for local government as provided for in the Constitution, could make a significant improvement to its capacity.
Other forms of inter-municipal co-operation Municipalities need not relate to each other through formal associations only. Inter-municipal co-operation may take many varied forms including: exchange of learning experiences; sharing of staff, technology and equipment; joint investment projects and collective purchasing.
International co-operation Municipalities can also engage with municipalities in other countries, through a range of mechanisms from informal linkages to formal twinning arrangements and membership of international municipal institutions. These linkages may provide numerous benefits to South African municipalities, including facilitating the sharing of international expertise and best practice experience.
 

Concluding comment

Strong and capacitated local government can play a critical role in enhancing the success of national and provincial policies and programmes, and building sustainable human settlements for the nation. In a spirit of co-operative governance, national and provincial government should seek to support and enhance the developmental role of local government.

SECTION C

DEVELOPMENTAL LOCAL GOVERNMENT

In this section This section explores the developmental role of local government its central responsibility to enhance the growth and development of local communities. It provides a definition of developmental local government, and proposes four inter-linked approaches to assist municipalities to effectively play a developmental role:
  • integrated planning, budgeting and management
  • managing the growth of local settlements
  • mobilising capacity for effective service delivery, and
  • linking growth and development.
 

1. DEFINITION OF DEVELOPMENTAL LOCAL GOVERNMENT

Three aspects of develop-mental LG The developmental role of local government has three inter-related aspects:
  • Maximising economic growth and social development: The powers and functions of local government, as assigned by the Constitution and as practised by local government, should be exercised in a way that has a maximum impact on economic growth and social development of communities
  • Integrating and co-ordinating: As the sphere of government closest to the ground, local government has a broader role to play: it has to integrate or co-ordinate the activities of other agents including other spheres of government within a municipal area. This is part of local government's responsibilities in terms of co-operative governance
  • Democratising development: Local government has a unique role to play in terms of building and promoting democracy. This goes well beyond simply representing their constituents. It involves facilitating and encouraging the fullest possible participation of citizens. Local government is uniquely placed to promote the active participation of citizens in budgeting, planning and implementation of development. In this way, local government becomes the vehicle through which citizens work to achieve their vision of the kind of place in which they wish to live.
Strategic, visionary LG This role can only be realised if local government becomes more strategic, visionary and ultimately influential in the way it operates. Municipalities have a crucial role as policy makers, as thinkers and innovators, and as institutions of local democracy. A developmental local government should play a strategic policy and visionary role, and seek to mobilise a range of resources to meet basic needs and achieve developmental goals.
LG has major influence on local economies Maximising economic growth and social development
Through its traditional responsibilities (service delivery and regulation), local government exerts a great influence over the social and economic well being of local communities. Each year municipalities collect a large sum in rates, user charges and fees. They employ thousands of people throughout the country. In many cases they are responsible for the price and quality of water, electricity and roads, and they control the use and development of land. In parts of the country they own substantial amounts of land. They purchase goods and services and pay salaries. They set the agenda for local politics, and the way they operate gives strong signals to their own residents and to prospective migrants or investors. These functions give local government a great influence over local economies.
Changes to existing procedures Simple changes to existing procedures such as buying local, linking municipal contracts to social responsibility, speeding up approval procedures or proactively identifying and releasing land for development could have a significant impact with no additional cost. In addition, new policies and programmes can be initiated, aimed specifically at alleviating poverty.
Basic services a constitutional right for all Local government is also responsible for the provision of basic services, an essential component of social and economic development. According to the Reconstruction and Development Programme and the Constitution, all South Africans are entitled to basic services, and government must take reasonable steps within its available resources to fulfil these rights. The starting point must be to prioritise the delivery of at least a basic level of services to those who currently enjoy little or no access to services. This can be achieved with the assistance of grants from the Municipal Infrastructure Programme (MIP), through local cross-subsidisation and through mobilising private investment in municipal infrastructure. Good basic services, apart from being a constitutional right, are a prerequisite for labour market participation and economic activity. Where municipalities can provide higher levels of services to residents and businesses, on a sustainable basis, this should be encouraged.
LG provides leadership and vision in development effort Integrating and co-ordinating
Any local area is a place where many differenent agencies, such as other spheres of government, parastatals, trade unions, community groups and private sector institutions, act. Developmental local government must see itself as the steward of all these other actors, providing a vision and leadership for all those who have a role to play in achieving local prosperity. Poor co-ordination between sectors and spheres could severely undermine the development effort. The Constitution gives local government jurisdiction over local areas (within the framework of co-operative governance). Municipalities, both individually and through organised local government, need to begin to fully exercise their jurisdiction of local areas.
 

LG must promote community involvement

Democratising development

Municipal Councils, as elected structures representing the diversity of community interests, play a central role in promoting local democracy. In addition to representing community interests within the Council, municipal councillors should promote community involvement in the design and delivery of municipal programmes.

LG must support individual and community initiative Municipalities should see themselves as not simply administering to residents, but also responding to them. There is a deep well of untapped innovation and creativity in communities. This creativity seldom gets drawn out. Ordinary people do not always know how to access information and institutional and financial support, to enable them to turn ideas for local development into real programmes. Municipalities can do a lot to support individual and community initiative, and to structure community energies into projects and programmes which benefit the area as a whole.
Participation and delivery -getting the balance right At the same time, the participative processes must not become obstacles to development, and narrow interest groups must not be allowed to "capture" the development process. It is important for municipalities to find the right balance between delivery and participation.
System to facilitate interaction with communities It is important to develop a system which facilitates and promotes interaction and communication with residents, to allow for meaningful participation in activities such as planning, budgeting, implementing specific projects, and community campaigns.
 

Human Rights

The Constitution and the Bill of Rights ensure that every person in South Africa is accorded human rights, which reflect the nation’s values about human dignity, equality and freedom. These rights are intended to guarantee certain essential freedoms, personal security and privacy. They include freedom of religion, expression, movement, trade, fair labour practices, ability to own property, and political rights. They further include access to a healthy environment, adequate housing, health care services, education, information, and to courts. They recognise the importance of protecting cultural heritages, and the rights to just administrative actions.

Municipalities should strive to ensure that these rights become part of the daily life experience of every person in the nation. With rights come responsibilities. Each of the rights described above will exist only as concepts unless each and every individual respects such rights, and commits himself or herself to work towards realising a society in which respect for rights is an every day reality.
 

Gender Equity

The Constitution compels local government to actively establish gender equity in society, through eradicating and replacing (internal and external) practices that systematically discriminate against women on the basis of their sex. A comprehensive strategy is required to bring about fundamental change as required by the Constitution.

There are a number of ways local government can promote gender equity, including the development of a Gender Policy in conjunction with its Affirmative Action policy, as required in terms of the Labour Relations Act. A Gender Policy should clearly express the commitment of the municipality to the principle of gender equality and specify concrete strategies in all aspects of operation, in systems and procedures, to advance women’s interests, participatory governance and human resources policies and practices.

Such a policy should further specify procedures for consultation and mechanisms to ensure that staff, councillors and community representatives have an opportunity to monitor the implementation of the policy. It should also be linked to clear performance targets.

 

  2. APPROACHES FOR DEVELOPMENTAL LOCAL GOVERNMENT

2.1. Integrated planning, budgeting and management

Prioritise most urgent tasks Municipalities need to develop a vision and to identify the key contribution they can make along with many other actors to achieve this vision. Local government is tasked with a wide range of powers and functions. While no task can be neglected, there is a danger that resources and capacity will be spread too thinly and that impact will be minimised, unless the most urgent and important tasks are clearly identified and energies and resources directed towards addressing these as a matter of priority.
  How can municipalities develop an integrated vision (a broad vision which takes into account all key factors) and ensure that both their own and additional resources and capacity are mobilised behind this vision? This Green Paper proposes a number of core interventions which will assist municipalities to achieve this. These are:
  • integrated development planning
  • financial and investment planning
  • environmental management
  • performance management.


Key elements of Integrated Development Planning 		Integrated Development Planning (IDP)
Integrated Development Planning is an important way in which municipalities can start to develop a strategic policy capacity, to mobilise resources and to target their own activities.

Integrated Development Planning is a process through which a municipality can establish a development plan for the short, medium and long term. As envisaged, it will involve:

  • a close assessment of current social, economic and environmental reality in the municipal area
  • a determination of community needs through close consultation
  • an audit of available resources, skills and capacities
  • a prioritisation of these needs in order of urgency and long term importance
  • the development of frameworks and goals to meet these needs
  • the formulation of strategies to achieve the goals within specific time frames
  • the implementation of projects and programmes to achieve key objectives, and
  • the use of monitoring tools to measure impact and performance.
Advantages of Integrated Development Planning In effect, IDPs are planning and strategic frameworks to help municipalities to fulfil their developmental mandate:
  • IDPs enable municipalities to direct their financial and institutional resources towards agreed policy objectives and programmes
  • IDPs are a vital tool to ensure the integration of local government activities with other spheres of development planning at provincial, national and international levels, by serving as a basis for communication and interaction. In future, the planning requirements of national and provincial departments will be linked to IDPs
  • IDPs serve as a basis for local government to engage with citizens and with various stakeholders and interest groups. Participatory and accountable government only has meaning if it is related to concrete issues, plans and resource allocations
  • They enable municipalities to weigh up their obligations and systematically prioritise programmes and resource allocations (what are the most important things to do and how best these can be addressed within available resources be used). Given the great inequalities of our society, IDPs provide a framework for municipalities to prioritise their actions around meeting urgent needs (addressing backlogs and promoting development), while at the same time maintaining the existing economic, municipal and social infrastructure, and
  • They help municipalities to develop a holistic strategy for poverty alleviation. Poverty is not just about low household income. It includes other aspects of deprivation such as a lack of assets to help households cope with shocks and stresses, a lack of legal rights, a lack of the resources or contacts necessary to secure political advantage, a lack of access to education, health care and emergency services, and lack of safe, secure, and adequately sized housing with basic services.

Integrated development planning is a challenge as well as an exciting opportunity for a new system of local government. It can help municipalities to find a focus within an increasingly complex and diverse set of demands, and help them to discipline resource allocations and institutional systems around a new set of development objectives.

 


5 year financial planning 		Financial Planning
Integrated development planning should be linked to financial planning. A Financial Plan involves producing a medium-term (5 year) projection of capital and recurrent expenditure. This means incorporating municipal Land Development Objectives (LDOs) and other strategies into the normal medium term planning for capital and recurrent expenditure. Municipalities should also develop a plan for raising the revenue to support these strategies and make sure that their plans are affordable over the long term. The Financial Plan should show how the priorities in the budget change over the five-year period in order to achieve the IDP and the LDOs.
Funding for infrastructure development On the capital side municipalities need to develop a coherent infrastructure investment plan, which sets out how they will achieve infrastructure targets, and mobilise public and private funding sources for this purpose.
Annual budgets based on 5year plan The medium term financial plan forms a basis on which annual budgets can be drawn up. The following diagram shows the relationship between planning and budgeting.
   


Planning for sustainable development 		Environmental Management
Sustainable development is development that delivers basic social and economic services to all, without threatening the viability of the ecological and community systems upon which these services depend. In other words, it is development which takes due care not to cause harm to the environment or to the community in general, recognising that human development depends on a healthy environment and healthy social structures. Municipalities can enhance sustainability by including environmental issues in their planning processes.
Local Agenda 21 Many municipalities are participating in Local Agenda 21, to reach towards sustainable development in their local areas. Local Agenda 21 requires municipalities to develop long term strategic action plans that address priority sustainable development concerns. These plans are based on similar principles to the IDP process.
SEAs and State of Environment Reports Tools such as 'Strategic Environmental Assessment', which is a process of anticipating and addressing the potential environmental consequences of proposed activities, can assist municipalities to integrate environmental concerns into policy and planning processes. 'State of the Environment' reports are another tool that could provide baseline information to assist with environmental planning.


Monitoring and evaluation 		Performance Management
Planning processes, including IDPs, financial plans and environmental planning, should be monitored and evaluated effectively. A municipality must set performance indicators, sometimes called Key Performance Indicators (KPIs), against which it can measure its own performance.
Key Performance Indicators KPIs should focus on the key development areas, and include both efficiency meaures and human development indices. Some examples of KPIs which have been used by municipalities are:
  • average response time to complaints from residents regarding service provision
  • unit cost of delivering water/ electricity to households
  • general administration and salary costs as a percentage of the overall budget
  • average commuting time for residents to and from work
  • incidence of diarrhoeal disease in the community
  • gender development index (the levelling of the playing field between men and women in terms of opportunities and access to resources).

Performance indicators should be used to measure whether the various projects and strategies contained in the IDP are working as expected. Over time, peformance indicators allow municipalities to adjust and adapt their IDPs to take account of past experiences.

Planning for future growth

2.2. Managing the growth of local settlements

In a context of rapid urbanisation, and complex changes in national settlement patterns, municipalities will need to place an emphasis on managing the growth of human settlements. For example, in expanding urban centres, growth management should anticipate and provide for the needs of rapidly growing populations. Growth management implies planning and investing now to meet future land-use and infrastructural needs for residential, commercial and industrial development.

Influencing growth There are a number of ways that growth can be influenced and managed, such as through land zoning, building regulations, property taxation, and land development. Further, investment in transport, basic services and housing infrastructure, is central to growth management.
Growth with equity The way in which municipalities manage growth is also critical for addressing inherited spatial distortions (for example, the way in which human settlements were fragmented along racial lines under apartheid). Unmanaged growth may simply entrench existing inequities


Mixed-use, mixed-income development 		Spatial Integration
Spatial integration is a central principle for growth management. Proactive (forward-looking) policies are required to encourage spatial reintegration and make land available in a way which promotes mixed-use and mixed-income development. For example, apartheid created townships which were intended only as dormitories for low-income workers and hence provided little or no work opportunities or social amenities. Mixed-use development seeks to provide for industrial, commercial, recreational, agricultural, conservational and cultural needs within a reasonable distance from residential development.

A useful starting place for physical planning and land development are the principles set out in Chapter 1 of the Development Facilitation Act (DFA). These principles are the basis for Land Development Objectives and Integrated Development Plans, and for all decisions taken by a municipality which relate to the development of land.

The DFA Principles The DFA Principles state that all laws, policies and administrative practices affecting land development should:
  • facilitate the development of both formal and informal, existing and new settlements there is therefore no bias in favour of any one sort of development and no individual community or group in an area can claim preferential treatment without a good reason
  • discourage land invasions without ignoring the reality and history of informal land development processes
  • promote efficient and integrated land development that, amongst other things:
    • integrates rural and urban areas, integrates poor and rich, black and white areas in towns and cities, and integrates different land uses rather than keeping them strictly separate
    • discourages urban sprawl and contributes to more compact towns and cities
    • makes maximum use of all available resources and avoids duplicating existing infrastructure and services;
    • promotes development of housing and work opportunities near to each other, and
    • encourages environmentally sustainable practices and processes
  • be clear and easily understood they should also provide guidance and information to people in or affected by the land development process, rather than simply trying to control the process and the people
  • promote sustainable development that:
    • is within the fiscal, institutional and administrative means of the country
    • establishes viable communities
    • protects the environment
    • meets the basic needs of all citizen in an affordable way; and
    • ensures the safe use of land.
Conflict management Authorities in each sphere of government must co-ordinate the different sectors in or affected by land development so as to minimise conflict over scarce resources.
 

Growth management

To manage growth effectively, it is essential to ensure that sectoral interventions, mainly in transport, housing and land functions, are coordinated, and support the municipal vision for how the local area will develop spatially over a period of time.



LGs can actively promote housing development 		Housing
In terms of recently proposed decentralisation of housing functions, municipalities are now required to be proactive in ensuring that housing development takes place. Amongst other things they must ensure that:
  • residents have access to adequate housing opportunities on a progressive basis
  • conditions not conducive to the health and safety of residents are addressed, and
  • services in respect of water, sanitation, electricity, roads, stormwater drainage and transport are provided in a manner which is economically efficient.

In addition a municipality must:

  • set housing delivery goals in its area of jurisdiction
  • identify and designate (set aside) land for housing development
  • create and maintain a public environment conducive to housing development which is financially and socially viable
  • promote the resolution of conflicts arising in the housing development process (unless the municipality is involved, or has an interest in, the matter)
  • initiate, plan, co-ordinate, facilitate, promote and enable appropriate housing development in its area of jurisdiction
  • provide bulk engineering services, and revenue generating services where such services are not provided by specialist utility suppliers, and
  • plan and manage land use and development.
Subsidies for housing projects Municipalities can become active developers of housing and undertake housing development projects. For these purposes municipalities can get access to housing subsidy funds via Provincial Housing Boards.


Transport Authorities 		Transport
Transport planning and infrastructure functions may also be decentralised to local government. The Provincial MEC responsible for transport may, in agreement with the municipalities concerned, designate a municipality, or a combination of municipalities, as a transport authority for its or their areas of jurisdiction, to be known as a transport area. The transport authority itself could include nominees from the constituent municipalities, MECs, and metropolitan and district governments. The MECs may designate Transport Authorities for the purpose of planning, co-ordination and integration, implementation, ensuring transport law enforcement, and monitoring and funding of land transport in the provincial and local government spheres.

A transport authority may enter into an agreement with a municipality or other institution to perform specific duties in relation to a transport area. Functions will include the establishment of fare structures, concessionary fares, travel demand management, marketing, promotion and publicity associated with provision of transport services, etc.
Resources available for transport There are a number of resources which municipalities may access to assist them with transport functions:
  • The Land Transport Fund can be used for grants for the establishment and maintenance of centres for development in transport engineering, transport economics, or related subjects connected with land transport
  • A transport authority may make available a grant for the promotion of transport planning, specific studies that need to be conducted, or updating a transport plan, for training in transport engineering or economics or related matters, and for the provision of public transport infrastructure and facilities required in terms of an approved transport plan, and
  • The MEC may make grants available to assist Transport Authorities in financing capital projects, the introduction of new technology, transport projects and enhancing economic development or incorporating private investment, etc.


Land administration powers 		Land
The Land Policy White Paper notes that much of the land administration function is likely to be delegated or assigned to Provincial government. Eventually, it may be appropriate for many of these functions to be located at local government sphere. This would bring the situation in rural areas in line with that in urban areas, where substantial land administration functions (related to planning and development control) are already vested at the local level. Land administration powers contribute significantly towards enabling municipalities to manage the growth of human settlements.
  2.3. Moblising capacity for effective service delivery

It is clear that developmental local government will require significant capacity, both to meet existing backlogs, and to continuously promote the social and economic well-being of the community. This is contrasted with the very real skills shortages and administrative problems faced by many municipalities, particularly in the rural areas.

Focus on meeting basic needs and quality of life

Core business

Choices about how scarce resources and capacity are utilised need to be guided by a clear focus on the core business of the municipality, ie, delivery of a core package of services aimed at meeting basic needs and progressively enhancing the quality of life of the poor, in a manner which is integrated and democratic. A focus on core business will entail some hard choices, and may mean cutting or re-directing programmes whose benefits are unclear.

Wide variety of delivery mechanisms Mobilising additional capacity
Scare capacity and resources also imply that municipalities will need to proactively search for appropriate delivery instruments. Partnerships with other organs of state, the private sector, NGOs, CBOs or other civil society structures can mobilise additional capacity. Central to this approach is the notion that while a municipality remains the ultimate authority responsible for ensuring that a service is provided, and regulating that service, it should be able to use different service providers to fulfil municipal development objectives. This means that a wide variety of delivery mechanisms can be developed to address the capacity constraints facing local government.
Partnerships for delivery Service delivery mechanisms include public delivery, public utlities, public-public partnerships, public-private partnerships, and public-community partnerships. These options are not mutually exclusive, and can be combined in a number of ways. Municipal choices about delivery options should be guided by clear criteria such as coverage, cost, quality and the socio-economic objectives of the municipality (such as job creation, equity, and integration).
  • Public delivery could be enhanced through a focus on core business, realistic integrated planning, and sound financial management. Interventions in administrative structuring could include the establishment of a strong centre for planning, performance management, auditing and information; combined with an emphasis on front-line innovation (new approaches to dealing directly with citizens), re-skilling, and training for transformation.
  • Public utilities (such as transport or bulk infrastructure utilities) have operated successfully in many parts of the world. They are usually agencies funded by public capital, owned completely or in part by a municipality (or jointly between spheres of government), with their own management structures. Public utilities provide an effective way to deliver public services to a large number of constituents, and may be best located at a metropolitan or district level.
  • Public-public partnerships, or public joint-ventures, allow for horizontal co-operation between municipalities to exploit economies of scale, or vertical co-operation (within municipalities) to improve co-ordination at the point of delivery. In addition to service partnerships, public-public partnerships are common in areas such as joint purchasing-consortia, training initiatives, technical support and information services. Public-public partnerships are relatively unexplored in the South African context. Methods to encourage these partnerships within a framework of co-operative governance (such as linking specific grant funding to collaboration between different spheres of government and/or different municipalities) should be investigated.
  • Public-private partnerships are a vehicle for combining the skills and assets of the public and private sectors. They can take many forms, such as service contracts, joint ventures, BOTs and concessions, and are often used as a mechanism to maximise private sector investment in municipal infrastructure. Where this type of partnership is 'municipality-driven', and aims to harness the capacity of the private sector to meet public interests, substantive benefits can be derived, including getting cheaper services, of better quality, to more consumers. If poorly managed and structured, the risks of these partnerships are high. In recognition of this, national government is currently developing a regulatory framework, which aims to ensure that forms of public private partnerships are properly regulated to ensure public accountability and the protection of consumer and worker rights as well as the interests of the private investor. In particular, regulation is important to guard against monopoly pricing, "cherry-picking" of high-income customers (serving only the wealthy and limiting access for low-income groups), poor quality services and unfair labour practices.
  • Public-community partnerships take many forms, ranging from community contracting for service delivery (usually maintenance functions) and neighbourhood-safety associations, to collaboration between municipalities and corporations which promote specific community interests (eg, inner-city regeneration). Where well conceived, these partnerships can contribute towards improved public services and promote constructive community-municipality interaction. These partnerships should be structured as part of an integrated delivery programme, and municipalities should guard against abdicating responsibility when they enter partnerships. It is particularly important to ensure that the poor benefit from partnerships and that their interests are not neglected.
Government assistance for building and managing partnerships While alternative delivery mechanisms bring additional capacity to bear on the challenges facing municipalities, municipalities will need to develop the capacity to manage new delivery mechanisms. National government will provide support to municipalities who wish to engage in service delivery partnerships, in the form of:
  • the development of a regulatory framework
  • ensuring that municipalities can access technical assisstance for service delivery partnerships, and
  • specific capacity-building programmes.
 

LED - all municipal activities should address inequality and poverty

2.4. Linking growth and development

Local economic development (LED) is not something separate from the daily work of the municipality. It does not require a department of its own. Rather, all the activities of local government need to promote economic growth. The overriding economic challenge for South African local authorities is inequality and poverty which can and should be addressed through all the functions of a municipality.



Ways to promote investment and enterprise 		Promotion of investment and entrepreneurialism
Municipalities should promote local investment and entrepreneurialism. Some ways in which municipalities can do this are:
  • marketing the local area to potential investors
  • providing investment support to ensure that potential investors are able to make their investments easily. For example, bureaucratic approval procedures can be shortened, as long as environmental and developmental standards are not compromised
  • assisting in small business development , through, for example, facilitating the establishment of Local Business Support Centres which provide credit, training, premises and so forth, and
  • the identification and release of land for development to ensure that land development is not subject to speculation and delays. If government identifies appropriate land for residential and commercial development and assigns development rights up front, it can speed up the development process and encourage spatial integration.
 

Growth and redistribution

There are a number of ways in which municipalities can promote growth and redistribution through development:

  • Public Works such as labour-intensive construction of roads, schools, clinics and other social infrastructure contribute both to basic services and job creation.
  • Local Procurement (buying goods and services) from small and disadvantaged businesses can provide a major stimulus to local producers. A municipality is often one of the largest purchasers of goods and services in a locality, and as such can stimulate demand from local businesses through buying locally. The '10 Point Plan on Public Sector Procurement' produced by the Department of Public Works proposes that preference in procurement should be given to those persons 'disadvantaged by unfair discrimination'. A clearly stated policy and selection criteria would be required to ensure fair application of any such preference system. Other strategies that might advantage local small enterprises are the division of large contracts into smaller parts, a reduction in the requirements to put up securities (guarantees), use of more accessible advertising media, and the provision of training and institutional support to small suppliers.

    In addition to supporting local enterprises, procurement can be used creatively to impose certain developmental conditions on suppliers. For example, suppliers might be required to employ local labour, provide employee training, work together with small enterprises or implement affirmative action policies. Municipalities can follow the example set by provinces in attaching conditions on banks wishing to handle government accounts. Similarly investors requiring building permits for profitable investments might also be required to fulfil certain developmental conditions. It is important to ensure that conditions are not so stringent that the benefits are offset by disincentives. This emphasises the need for clear development goals to be established up front.
  • Planning Linkage can mobilise resources and capacity for development of housing and other infrastructure. Where significant profitable investment in a particular locality has raised property values and created a competitive market, municipalities can consider linking development rights in such an area to development of housing and services for the poor. This strategy may be appropriate where townships border growth areas. This technique has been used very effectively elsewhere in the world, and although it may initially generate some opposition from developers, it generally tends to lead to a climate of social responsibility and balanced development over time.
  • Local Training Programmes can promote investment and assist the poor in sharing in the benefits of economic development. Municipalities may contribute through, for example, improving the training provided to their own employees, or requiring that all companies contracted to the municipality provide a minimum level of training to their employees.
 

Concluding Comment

Municipalities face great challenges in addressing past backlogs and spatial distortions, meeting the needs of local communities, and planning for a sustainable future. In order to meet these challenges, municipalities will need to take a developmental approach which:

  • enhances their capacity as policy and planning centers, able to mobilise and manage a range of development initiatives, resources and processes through a coherent vision and integrated planning framework for their local area, and
  • focuses their own institutional and financial capacity on the efficient delivery of targetted programmes, and harnesses additional capacity and resources from other sectors.

A developmental role for local government offers substantive benefits to local residents, communities, provincial and national spheres of government, and the nation as a whole.

 

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