Chairperson, in terms of section 1 of the Constitution of the Republic of South Africa, national and provincial governments are required to provide support to and strengthen the capacity of local government. The provincial sphere of government was developed without a coherent policy framework to guide its operations towards the realisation of this provision. The Department of Co-operative Governance and Traditional Affairs was therefore mandated to develop a White Paper on provincial governance and review the White Paper on local government.
In terms of section 106 of the Local Government: Municipal Systems Act, provinces must establish mechanisms, processes and procedures that are in line with the provisions of section 155(6) of the Constitution of the Republic to monitor municipalities in managing their affairs, exercising their powers and performing their functions. The legislation developed to guide the performance, operations and functioning of local government, informed by the Constitution and the White Paper on local government, include, amongst others, the Local Government: Municipal Systems Act, the Local Government: Municipal Structures Act, the Local Government: Municipal Finance Management Act, the Local Government: Municipal Property Rates Act and the Traditional Leadership and Governance Framework Act. It is through these pieces of legislation that inroads were made to fight poverty at the local sphere of government. Since 1994 the number of households with access to water supply has increased by more than 30%, the number of households with access to basic sanitation has increased by more than 35%, and the number of households with electricity connections has increased by more than 30%. More than two million houses have been constructed over the past 15 years to provide shelter to those without houses.
Over and above this, there are policy questions and proposals that have emanated from the experience we have had over the past 15 years, which mainly focus on public consultation to strengthen the quality and democracy of local government. Municipalities have not been proactive in providing feedback and accounting to the community on their performance as required by the legislation. There is room for municipalities to build meaningful partnerships with community-based organisations, labour organisations and the private sector.
Municipalities are further faced with the challenge of financial management and revenue generation. A number of municipalities are faced with bankruptcy, while others are running deficits. Regardless of these challenges that municipalities are facing, there is a steady improvement in the development of Local Economic Development, strategies and policies, but the challenge remains with the implementation of these strategies and policies. A new department has been established, which should be focusing on economic development. The question therefore arises as to how Co- operative Governance and Traditional Affairs will be working with this department and provinces to ensure that job creation at the municipal level is intensified, given the challenges caused by the global economic downturn.
Given the challenges mentioned above, a number of municipalities have been placed under both section 106 of the Local Government: Municipal Systems Act and section 139 of the Constitution. This process is a challenge both in respect of capital and human resources to assist these municipalities that are in the ICU. Provisions are made for the department in this budget to ensure that provinces are not held back by a lack of resources in exercising their mandate to assist municipalities that are not performing well. The role and function of the provincial sphere of government is critical in addressing the above-mentioned challenges in local government, as it is the sphere that is closest to local government. The areas which need improving are those of synergistic connections between provincial growth and development strategies and municipal integrated development plans. Municipalities must develop realistic IDPs and credible Local Economic Development, LED, programmes. Obviously, the operationalisation of these programmes is critical, as municipalities would need the material and human resources as well as the management and operational systems to implement their IDPs and LEDs.
However, the department addressed the fundamental weaknesses of local government, which includes the following: Poor planning; weak links between planning, policy-making and budgeting; poor expenditure control; little relationship between formulated and executed budget; poor cash management; and poorly motivated staff. There is a lack of alignment between the budgeting and planning regimes, which means that the system is not functioning as cohesively as it ought to. It has in a way contributed to poor spending, especially with regard to the municipal infrastructure grant. These funds are often rolled over or withdrawn by both the department and the National Treasury.
Meanwhile service delivery remains a serious challenge. It is imperative that the department introduces measures through this budget to ensure that the provincial government, as the sphere working closely with local government, reduces cost spending to the lowest possible figure.
The new support programme for municipalities should seek to instil greater certainty in the support, monetary and supervisory regimes that affect the local and provincial spheres of government. The big question remains as to how much has been set aside by the department to assist municipalities to perform their functions through the guidance and support of the provincial sphere of government. It should also be noted that some municipalities are financially not capable of paying salaries to staff, while some provinces are battling to implement fully the provisions of both section 106 of the Local Government: Municipal Systems Act and section 139 of the Constitution. We need to level both financial and human resources. If this issue is not addressed with the urgency it deserves, we will still have a long way before we can win the battle against poverty and service backlogs and achieve a well-established, well-functioning system of local government.
The efficiency and effectiveness of hands-on support through the two-year programme of Project Consolidate remains critical. A number of municipalities that were part of Project Consolidate have been placed under section 139, while others gained a sure sense of relief as a result of this programme. Thank you very much. [Applause.]