Chair ... [Interjections.] I learnt from the best!
Chairperson and all protocol observed, today offers us an important opportunity to look back over the past year and assess our performance, and to look forward to the coming year to determine where we can do better. It goes without saying that there is a great deal of room for improvement in the coming year.
The marked increases in service delivery protests and the major challenges which a number of municipalities are faced with, from the largest metros to the smallest councils, clearly indicate that all is not well in the state of local government. People are not happy, and we all need to urgently occupy ourselves with how we can improve the situation.
In the limited time that I have today, I am going to focus on what I like to call the four Cs. It's my belief that if the department and we as a committee grapple with these four major challenges in the coming year and deal with them effectively, then we will make significant improvements. These four Cs are capacity, corruption, compliance and consequences.
I'll first turn to capacity. The National Development Plan - which, I'm delighted, was mentioned here by you today, Minister, and which some of your Cabinet colleagues treat as a swear word - makes very specific reference to building a capacitated and effective local government. What we are yet to see from the department, though, is an effective and workable plan to improve and create this capacity at the local government level. We've seen some initiatives through Operation Sukuma Sakhe and there have been some limited effects of that, but it hasn't achieved the desired results.
In their last presentation to the portfolio committee, the Financial and Fiscal Commission clearly stated that the funding gaps that currently exist at the local government level are irrelevant, unless the capacity is there at local government level for municipalities to be able to do something. This is perhaps best illustrated by the expenditure patterns which exist around conditional grants. Massive amounts transferred on an annual basis to municipalities are often returned, unspent, at the end of the year. Municipalities are unable to spend this money because they lack the capacity, technical management and financial skills. We cannot simply continue to throw money at the problem to have it keep bouncing back at us with no improvement in service delivery on the ground. We need to explore withholding conditional grants from repeat offenders, but this cannot be done unless a proper capacity-building programme has been embarked upon.
Minister, I'm delighted to hear the announcement you made today about business getting its hands involved. If ever there was an admission that the state has failed and that there is a role in government for the private sector, then I think this programme is it. I certainly wholeheartedly welcome it. It is privatisation on a scale that would have made even Margaret Thatcher proud. I was delighted to hear that.
There is undoubtedly a causal link between service delivery failure and a lack of capacity. We saw it in Ermelo when the committee went out there. The town was without water for a number of months and the dams were all dried up. The person who was in charge of technical services in the municipality was underqualified, very new and unable to roll out the work that needed to be done.
The Auditor-General's report on the audit outcomes also outlines the use of consultants, which surely has to be another clear example of the capacity crisis which we face at the local government level. During the past financial year, some R360 million was spent by municipalities on consultants. In 168 out of 198 instances where consultants were used, they were engaged due to a lack of the necessary technical skills. In only 13 of those instances was it due to vacancies. Of course, the reality is that if we withdrew consultants out of the system, many municipalities would simply collapse. The department must, as a matter of urgency, examine how we can ensure that, when consultants are used, there is a programme in place to impart these skills to the employees.
Last year the Minister announced that the regulations envisaged in terms of the Local Government: Municipal Systems Amendment Act of 2011 would finally be released. He subsequently missed several deadlines to table these - and I noticed that it wasn't mentioned today. It took vigorous intervention from the portfolio committee to finally get these tabled. Whilst it's lamentable that they are late, they will nonetheless go a long way in improving the quality and ability of senior municipal managers - that is, of course, if they are implemented - but more about that later.
With regard to this matter, it is most interesting to note that last night the SA Municipal Workers' Union, Samwu, indicated that they will be challenging the Minister in court on his ability to pass these regulations. We simply cannot afford to delay these regulations a moment longer. I wonder if the Minister, in his response, will outline what his intentions are on this matter. Will he be able to stand up to the unions and on the side of service delivery?
I now turn to corruption - sadly, another example where the department's words have not matched up to the outcomes. Corruption Watch indicated that by far the greatest majority of the calls on their tip-off line are about corruption in municipalities. The continued confusion that exists around the role, powers and functions of the anticorruption inspectorate has not helped. I certainly welcome the Minister's comments in this regard. However, we still ask the questions: What has happened to the cases the anticorruption inspectorate was dealing with? Where are they? What is the state of the prosecutions? All we've heard about in this regard in the committee is a parable about Balaam and his donkey. [Laughter.] With respect, we don't need parables; we need progress and prosecutions.
During the course of last year, I asked in the portfolio committee to be provided with a schedule of all those municipal officials who were criminally charged in terms of either the Local Government: Municipal Finance Management Act, MFMA, or the Public Finance Management Act, PFMA, prosecuted and then sentenced to jail or forced to pay back their ill- gotten gains. Well, we are still waiting for the list and it's my suspicion that that list does not exist. Unless a hard line is taken, we are not going to get the scourge to recede; it's going to grow. The department needs to pick some high-profile cases in each province, focus on them like a laser beam and prosecute them to the fullest extent.
I turn to compliance. We are blessed in our country with some of the most progressive and useful legislation in the world: the Local Government: Municipal Finance Management Act, the Public Finance Management Act, the systems Act, and the structures Act. But, really, what is the point of having these pieces of legislation unless it is actually complied with by municipalities and provinces?
There are some great examples such as the Mpisane matter in the city of eThekwini. Somebody who should have been disqualified in terms of section 112(l) of the Local Government: Municipal Finance Management Act was awarded multimillion rand tenders. Of course, it's easy to blame Mpisane for the huge mess. The blame must actually lie squarely at the door of the eThekwini Municipality which has been lax in ensuring that the conditions of the Local Government: Municipal Finance Management Act are implemented.
It should not be the role of the public and the opposition to police these regulations and force their implementation. That job should rest squarely on the Department of Co-operative Governance and Traditional Affairs. There needs to be a far greater focus in the coming year on working with the provincial departments of co-operative governance and traditional affairs and legislatures to improve the compliance framework in municipalities.
The Auditor-General, in his latest report, has flagged noncompliance with key legislation, particularly in respect of supply chain management, as one of the key reasons why municipalities do not achieve clean audits. Unless attention is given to this key area of legislative compliance, the lofty goals of Operation Clean Audit will remain a distant and unattainable dream. It is notable, as the chairperson has pointed out, that the Minister spoke about the many progressions - and we say "Amen" to that - but what he didn't refer to was those who had progressed and then regressed in the following financial year. We have to find ways to stabilise those municipalities to ensure that, once a clean audit is achieved, the systems are in place to ensure that that continues.
Surely we cannot continue to rely on the Municipal Turnaround Strategy to address these issues. We all know that the results of the Municipal Turnaround Strategy have been fair to middling. Many of the local turnaround strategies are nothing more than wordy documents gathering dust in the drawers of municipal managers and mayors. Some mayors refuse to implement them because they feel that they are part of their predecessors' legacy. We need to address that.
Finally, I want to turn to consequences or, more appropriately, the lack of consequences, because this is the golden thread that runs through all the other issues I've already addressed. Again this year, the Office of the Auditor-General highlighted the lack of consequences as one of the key features why there has been such poor audit outcomes at local and provincial government level. This has to be one of the key areas in which the department is failing and needs to apply itself in the coming year.
We seem to have become very good at talking about consequences, but what are we actually doing about them? How can it be that municipalities that receive adverse audit opinions then reward municipal managers with performance bonuses? How can municipalities that overspend their budgets and underspend on grants be rewarded with salary increases? How can it be that disclaimers become nothing more than a single day of bad headlines for a particular council?
The problem is that the current system rewards mediocrity and it molly- coddles poor performance. If you can't do your job a consultant is hired to do it for you. If you steal in one department or council, you are moved to another. Instead of showing poor performers the door, we just give them more and more. This is simply not good enough and not going to change people's behaviour.
We need to weed out poor performance and encourage good governance. We should only be rewarding excellence. This is precisely why we need a consequence framework that sets out very specifically the consequences that those who do not perform and do not do their job properly will face. Wouldn't it be great if such an achievement in this department and by this Minister could lead the way in developing such a framework in our country?
If local government is everybody's business, then let's get down to business. When it comes to service delivery, we should show that we really do mean business. I thank you. [Applause.]