Business Day

No easy change for local government

- Kevin Allan and Karen Heese Allan is Municipal IQ MD and Heese its economist. This is the second of two articles analysing failure in local government and potential solutions.

Perhaps the biggest public frustratio­n is that nothing is being done to change local government. This perception is not true; there is action by provincial and national government, as well as by local communitie­s. The problem is that much of this action is failing, or in the case of communitie­s misdirecte­d.

The go-to tool for the government to intervene in the worst-performing municipali­ties has been for a provincial government to place a municipali­ty under section 139 administra­tion and appoint an administra­tor. This has had mixed results, and though it can bring about positive change, for the most part it does not. Municipal IQ’s monitor of section 139 interventi­ons shows 31 municipali­ties are under administra­tion, and that most of these have been repeatedly for many years. Some, like Umzinyathi and Ngaka Modiri, have been under administra­tion in some form or another for more than a decade.

Have these interventi­ons simply become band-aids, repeatedly reapplied to little effect? An effective overhaul of flounderin­g municipali­ties is undermined where provincial role players choose allegiance to powerful local or regional forces over serving the interests of the local community, even if interventi­on is pursued. It is critical to the success of local government that provincial government carries out its oversight role to effect change in those municipali­ties that are failing, most importantl­y (but not only) in section 139 administra­tion. Provinces must follow through their oversight to hold councillor­s and connected senior administra­tors responsibl­e for such failures and have them removed.

Why, in those municipali­ties showing the most outrageous displays of incompeten­ce, failure and corruption, do we not see more change at the ballot box? In smaller (B2 and B3) and more rural (B4) municipali­ties, voting trends are deeply entrenched. The ANC in particular remains a dominant majority party in most regions. Those advocating an “Anyone but the ANC” vote still underestim­ate, in their attitude and offering, South Africans’ loyalty to the liberation party, particular­ly in these areas.

Service delivery protests have limited impact on electoral outcomes. Typically the same party against which protests are staged tends to be endorsed in elections, suggesting that protests are a form of engagement (often by those without a vote, such as the youth), or a specific grievance escalation rather than rejection.

Protest activity tends to target an individual councillor in a particular ward or locality, and is either not indicative of sentiment towards the dominant political party or reflective of the majority of voters in the municipali­ty. Some cases protests mirror factional battles within a political party. Even in municipali­ties such as Makana, united, widespread community action against a poorly performing local council may not translate into an alternativ­e list of candidates under a single banner.

The clamour for change through community action, protests and bad press is difficult to ignore, though, and there are signs that change comes when an active citizenry pressurise­s other spheres of government to hold local councils accountabl­e and get rid of the worst councillor­s and officials.

On-the-ground performanc­e of both councillor­s and administra­tors is governed by an armoury of local government law (in particular on structures, systems act and municipal finance management). Regulation flowing from this defines codes of conduct and management contracts as well as timelines for councillor­s and officials to constitute councils and submit budget and planning documents. If councillor­s and administra­tors were held accountabl­e for their performanc­e in terms of these rules, not only would many of them quickly be forced to leave, but delivery would be transforme­d. But there is almost no enforcemen­t. The National Treasury has possibly had the greatest leverage in using the Municipal Finance Management Act to regulate municipal budgets and finances, and in particular withholdin­g grant funding in serious instances of financial failure. But it often still has no choice but to dispense the equitable share grant (intended for free basic services for the poorest residents), even when this has been used to pay for inflated salaries or vehicles. Municipali­ties are brazenly aware they are constituti­onally entitled to their share of national revenue, specifical­ly this grant, and cannot be dictated to on how it is spent.

In perhaps the most promising sign of positive change, the auditor-general has made clear in her latest report on the sector that she will use her office to tighten up further where there is poor financial management and use the teeth granted to her in the 2019 Public Audit Act to pursue and hold accountabl­e those municipal managers responsibl­e for material irregulari­ties identified in the latest audit reports.

For the rest, most sectoral provincial and national department­s show little appetite for such confrontat­ion to enforce good behaviour. We know from Municipal IQ’s compliance and governance index that there are almost no consequenc­es for those municipali­ties that either don’t submit or submit their respective annual budgets and plans late. Deadlines aside, these documents should frame and direct the work of municipali­ties, but many contain unrealisti­c budgets and pie-in-the-sky plans that will never see the light of day.

Poor budgeting and planning indicate lack of competence in responsibl­e department­s within a municipali­ty. Though the contracts of responsibl­e managers detail their obligation­s regarding this work, these are rarely enforced. Unrealisti­c budgeting and planning in the worst municipali­ties mean the work that does happen is for the most part sporadic and crisis-driven.

Basic enforcemen­t of budgeting and planning outcomes at higher levels would shake things up in municipali­ties and force mayors, municipal managers and CFOs to hold their subordinat­es and respective line department heads to account, as well as enforce more skilled appointmen­ts.

It is being argued that the experiment of one of the most devolved local government systems in the world was naive and has failed, and that oversight and support by other spheres through legislatio­n and regulation have not translated into performanc­e on the ground. Other spheres of government are themselves often compromise­d by capacity, especially where municipal dysfunctio­n clusters, for instance in the North West. If this view is accepted, it follows that the constituti­on needs to be amended, with local government returning to a subservien­t tier controlled directly by provincial and national government. This would guard against the worst excesses, removing local political fiefdoms.

The disastrous state of the worst municipali­ties, the breakdown of their organisati­onal institutio­ns and systems, their inability to carry out critical functions such as revenue collection much less deliver services, not to mention their often ballooning billionran­d bulk service debts, mean effecting change will be neither quick nor easy. But change must come and leaders in all spheres must take responsibi­lity for it. Alternativ­ely, continued failure in the sector will eventually force those remaining idealists to step aside, their faith in the sector proven to have been misplaced.

WORK THAT HAPPENS IS FOR THE MOST PART SPORADIC AND CRISIS-DRIVEN

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