Local Government, Local Governance and …seg.fsu.edu/Library/Local_Government, _Local_Governance_and...Local Government, Local Governance and Sustainable Development Getting the Parameters

Local Government, Local Governance and Sustainable Development

Getting the Parameters Right

Doreen Atkinson

HSRC Publishers

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Integrated Rural and Regional Development Research Programme, Occasional Paper 4

Series Editor: Mike de Klerk (Executive Director: Integrated Rural and Regional Development,

Human Sciences Research Council)

Published by the Human Sciences Research Council Publishers

Private Bag X9182, Cape Town, 8000, South Africa

© Human Sciences Research Council

First published 2002

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form

or by any electronic, mechanical, or other means, including photocopying and recording, or in

any information storage or retrieval system, without permission in writing from the publishers.

ISSN 1684-5250

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Preface

The Human Sciences Research Council publishes a number ofOccasional Papers series. These are designed to be quick,convenient vehicles for making timely contributions todebates, disseminating interim research findings and otherwiseengaging with the broader research community. Publicationsin the various series are, in general, work-in-progress whichmay develop into journal articles, chapters in books or otherfinal products. Authors invite comments and suggestions fromreaders.

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About the Author

Doreen Atkinson is a Research Director with the HumanSciences Research Council. She is based in the Bloemfonteinoffice of the HSRC. She has research and consultingexperience in the following fields:

• Local Government• Rural Development• Intergovernmental Relations• Constitutional Development• Water and Sanitation• Local Economic Development• Monitoring and Evaluation• Health Delivery

Her publications during the last five years, include From a Tierto a Sphere: Local Government in the New South African Consti-tutional Order (co-edited with Maxine Reitzes, published byEISA and Heinemann Press, 2000); Rural Development Frame-work, for the Free State Provincial Government; and A Pathway to Sustainability: Local Agenda 21 in South Africa(co-edited with Penny Urquhart, for the Department ofEnvironmental Affairs, 2001). She is currently working onmunicipal capacity-building, especially in the light of theimplementation of IDPs; as well as the development ofmunicipal capacity in commercial agricultural areas.

Comments and suggestions on this paper can be emailed [email protected]

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Getting the Parameters Right

Introduction

Since 1994, South Africa has experienced a steep learningcurve with regard to institutional design in general, and localgovernment in particular. When the transition to democracytook place, South Africa inherited a dysfunctional local govern-ment system, based on inappropriate jurisdictions, structuresand programmes. During the past eight years, great progress hasbeen made in designing municipal systems and governmentalprinciples intended to promote sustainable development.

This chapter will highlight some of the achievements, whichhave provided the building-blocks for a development-orientedsystem of government and governance. However, achieve-ments often bring unintended consequences in their wake,giving rise to new problems and challenges. This chapter willalso reflect on the short and long term interventions that willneed to be made so that the governmental system can deliverthe desired outputs and impacts.

Government is a means, not an end. Ultimately, it is a tool,an instrument to achieve a desired (developmental) end-state.At this stage in South Africa’s development experience it is

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necessary to ask: Have we designed the right kind of instru-ment? Are we ending up with a hammer or a spanner when weshould actually have designed a welder or a pair of bellows? Insum, will our system of government promote development-oriented governance? And what can we do to nudge it increas-ingly into that direction?

In this chapter, consideration is given to the way in whichlocal government is placed within the total system of govern-ment. Consequently, municipalities’ external relationships areas important as their internal functioning. It is only within sucha holistic view that the future development path of munici-palities and local areas can be understood and promoted.

‘Government’ and ‘governance’

‘Government’ is an institution. An institution, in turn, is a setof internal roles and relationships, rights and obligations,responsibilities and functions. An institution consists of peopleassigned specific positions, functions and roles within anorganised structure. A development-oriented government,therefore, is one that has designed its internal relationships insuch a way that specific developmental goals are achieved.

‘Governance’, in contrast, refers more broadly to the environ-ment in which government functions, and to government’srelationships with outside stakeholders.A system of governancerefers to government’s relationships with the electorate, thepublic, the consumers of services, and non-state actors. Adevelopment-oriented system of governance, therefore, is aninstitutional environment in which government creates thetypes of relationships with outside stakeholders that encouragethose stakeholders to launch and sustain developmentalinitiatives.

During the past eight years enormous progress has been madein designing development-oriented government structures andgovernance systems in South Africa. The most significant inno-vation has been the formal adoption of ‘developmental local

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government’ as the cornerstone of development policies andprogrammes. In terms of the White Paper on Local Government(1998), the Municipal Structures Act1 and the MunicipalSystems Act,2 municipal government has come to the fore asarguably the most important level of government in the over-riding purpose of promoting development.

The importance of local government is based on several keyfactors. Firstly, local government is intrinsically multi-sectoral.It is the only sphere of government that has the mandate tobring together a variety of sectoral issues within one develop-mental policy, programme or project. Secondly, localgovernment is ‘closest to the people’. This oft-used phrase hasseveral aspects. For one thing, municipal offices are oftensimply geographically closer to residents than other levels ofgovernment and, especially for poor people, such offices areoften easier to reach. For another thing, local councillors havea much smaller constituency to report to than public represen-tatives at provincial or national level, and can thereforeconcentrate on issues and local matters that are highly com-munity-specific. More specifically, the ward system ofrepresentation – unlike the proportional representation systemat provincial and national level – means that councillors mustattend to the needs and interests of specific neighbourhoods.Since councils are elected institutions, it means that acouncillor who consistently fails to ‘deliver’ can be removed atthe end of his or her term of office – or even during it.

The third important dimension of local government is thespatial one. Increasingly, development theorists and plannershave come to realise that development is profoundly labour-intensive. Real development requires ongoing involvement withbeneficiaries and communities, whether in the form of leader-ship development, institutional capacity-building, public parti-cipation in planning or project implementation and frequently,conflict management. It simply makes more sense for suchdevelopmental activities to be based at a level of governmentthat is staffed by people who are physically accessible to resi-dents, and who preferably live within the local community.


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Clearly, then, local government must play a key role withinthe developmental renaissance that Africa – and South Africa –have embarked upon. In this regard, South Africa is at thecutting-edge of development debates. The claim that municipa-lities are the primary developmental agency within thegovernmental system has radical and far-reaching implicationsfor governmental structuring and practices. The real challenge,now, is to work through the implications of these claims anddebates. What would ‘developmental municipalities’ look like?How would they function? What would their relationship bewith other institutions within the system of government? Andwhat should their relationships of ‘governance’ be with otherdevelopmental players?

Municipalities are currently at a critical juncture in theirdevelopment. Since mid-2001, municipalities have beenrequired to write ‘integrated development plans’ (IDPs).TheseIDPs are intended to be multi-sectoral programmes, includinga wide variety of development, ranging from ‘hard’ servicessuch as water, sanitation, electricity, housing and roads, to ‘soft’or ‘human development’ issues such as land reform, poverty-alleviation, tourism and local economic development (LED).

Many municipalities completed their IDPs during early2002. The crucial question now is: Will they have the capacityto implement their IDPs? Or will IDPs become dust-coveredtomes that grace municipalities’ bookshelves? This paper willconsider some of the developmental questions that arise fromthe need to implement IDPs. The argument will proceed fromquestions of internal municipal management, to inter-municipal relations and, finally, to inter-governmental rela-tions. This paper will argue that the creation of developmentallocal government will require the contribution of every othercomponent of the governmental system. It has to be aninstitutional ‘rebirth’, based on a profound redesign of thegovernmental system as a whole. Municipal capacity-buildingcannot be dealt with in isolation, in piecemeal fashion. It hasto be part of a holistic re-orientation of government and gover-nance.

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The impending challenge – implementing IDPs

Before 1995, municipalities focused primarily on the regularmaintenance of infrastructural services and social facilities.Municipalities maintained streets, water pipes, storm waterdrainage, electricity networks, parks and cemeteries. Whennecessary, they planned new housing estates and infrastructureworks. On occasion, municipalities adopted innovativeeconomic or tourism strategies, but these tended to be theexception – particularly in the poorer rural areas.

Since 1995, the entire raison d’être of municipalities haschanged. Municipalities are now required to become theforemost development agencies within the governmentalsystem. The writing of IDPs was the formalisation of this newrole – each municipality had to define its own developmentalvision and mission, and identify specific programmes andprojects.

The completion of IDPs means that, figuratively speaking,‘the dog has caught the bus’. In many municipalities, thedevelopmental challenge is much greater than was everenvisaged. Not only must municipalities undertake a varietyof infrastructural projects, but they must also define andimplement complex social and economic developmentprojects.

Furthermore, the leadership role of municipalities hasbecome paramount. Until 2000, many national and provincialline departments implemented rapid infrastructure roll-outprogrammes, within municipal jurisdictions. However, themunicipalities largely remained spectators in this process,with effective authority placed firmly within national andprovincial departments. This dynamic has been turned on itshead. National and provincial departments are now requiredto tailor their programmes to the IDPs written by munici-palities. Furthermore, such departments are required to assistmunicipalities to take the lead in project implementation.Not only has the dog caught the bus, but the tail is waggingthe dog.


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What do these changes mean for municipal capacity-building? At least three issues become very important toaddress. The first is the level of project management capacitywithin municipalities. The second is the design of municipalorganisations. The third is the redefinition of existingfunctions.

Project management capacity There is a glaring lack of suchskills within most municipalities. Until now, municipalitieshave undertaken development projects simply by using theirexisting senior and middle-level staff. Typically, heads oftechnical departments, heads of administrative supportdepartments and environmental health officers have managedprojects. This was usually in addition to their normal line func-tions. Many of these staff members lack project managementskills and, in particular, skills of interacting with developingcommunities. Owing to the existing levels of overwork inmunicipalities – often because of staff cuts caused by risingwage bills, in turn caused by trade union pressure – manymunicipalities outsource development projects to consultants.This has been the case, in particular, with water and sanitationprojects. Such consultants are typically paid by the Depart-ment of Water Affairs, and not by the municipalities.

There is clearly a great need for creating project manage-ment capacity within the municipalities, both in terms of staffavailability and in terms of relevant skills. One solution is forthe municipality to appoint a Head of Development, assistedby one or several project managers.

Design of municipal organisations South African municipa-lities are typically designed according to conventional linedepartments (finance, administration, engineering/technicalservices and, occasionally, social development). There is nouniform placing of functions within municipalities. In somemunicipalities, for example, libraries and museums fall under‘administration’, while in others they fall under ‘social deve-lopment’. Similarly, ‘environmental health’ is put in the

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administrative department or the technical department.Sanitation services sometimes fall under ‘technical services’,and in other cases under ‘social development’.

The common thread in this diagnosis is that municipalorganisations are, almost invariably, ‘input-based’ – organisedaround convenient inputs, such as finance and money – andnot ‘output-based’. An ‘output-based’ municipality wouldlook very different. It would focus on infrastructural develop-ment, poverty-alleviation or investment promotion, and createa strong developmental department, possibly with these issuesas sub-directorates. In such an output-oriented municipality,the administrative, financial and technical departments wouldbe primarily aimed at supporting the developmental depart-ment(s). Their allocation of resources would be substantiallyproject and programme-oriented. The developmental depart-ments would be able to call on the supporting departments forresources, in different combinations, on different programmesor projects.

Re-defining functions As noted above, many municipal serviceswith pronounced developmental dimensions have remainedminimal or narrowly defined.This explains why a function withsuch potential developmental impact as the library has beenclassified as ‘administrative’, or environmental health officers areclassed as ‘technical services’. In a truly developmental munici-pality, libraries would become key sources of public informationand awareness-raising. Sanitation would not refer only to theinstallation of sewerage reticulation or toilets, but to hygieneand environmental health education within the community aswell. ‘Environmental health’ would be used to promoteenvironmental awareness in many interesting and mutuallysupporting ways, particularly for children. ‘Street cleansing’would not only refer to the removal of litter, but also to environ-mental health education regarding littering and the preservationof open spaces.

There is a great need to think creatively about currentmunicipal functions, and to harness them as part of cross-cutting


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developmental programmes and projects. Many of thesefunctions should then be grouped under strong developmentaldepartments. Additional developmental functions, such as localeconomic development local economic development (LED),land reform and poverty-alleviation, would also be housed insuch developmental departments, which would promote co-operation and synergies among sectoral staff (environmentalhealth officers, librarians and other project or programmemanagers).

The new demarcation of local government

Municipal government has undergone a difficult transitionsince 1999. In terms of the new demarcation, the original 843municipalities3 have been reduced to 284.4 Several principlesinformed the demarcation process, including:

• the amalgamation of urban areas and their ruralhinterlands;

• the combining of several urban areas within single munici-palities, thus reducing the duplication of senior staff;

• the consolidation of municipalities into spatial areas thatmake sense from an economic, topographical and infra-structural point of view; and

• the inclusion of richer and poorer areas, thus making someredistribution possible.

However, experience since the municipal elections of December2000 has shown that the administrative dislocation associatedwith the re-demarcation may have been underestimated. Themunicipalities that have experienced the easiest adjustment arethose where a strong core municipality was combined with ruralor peri-urban areas. In cases such as Kimberley, it has beenrelatively easy for the ‘mother municipality’ to include its hinter-land into its core operations.

In other areas, a variety of painful adjustments have had to bemade. The integration of the administrative, financial and infor-mation technology systems of several previously autonomous

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municipal administrations has proven to be time-consuming,complex and difficult. Some of these problems are due to theinherent incompatibilities of very different municipal admini-strative systems. For example, staff with very different taskdescriptions and remuneration levels had to be integrated into acommon organogram. The new municipalities had to integratedifferent tariff structures for municipal services, as well asdifferent levels of municipal rates. Disparate credit controlpolicies and indigent policies had to be aligned. Asset registersand insurance policies needed to be consolidated – often inmunicipalities already hampered by poor systems of datamanagement. In many cases, towns with strong accumulatedfinancial reserves found those reserves eaten away by townswith huge inherited debts. In other cases, rates systems had to beco-ordinated in areas with different levels of property values,causing a massive decline in revenue.

Many municipalities are still reeling from the financial impactof amalgamation. In addition, some new municipalitiesexperience problems caused by poor political decisions on thepart of new and inexperienced councillors. Valuable municipalexperience was lost, as senior municipal officials have beenencouraged to take voluntary retrenchment packages to makeway for more politically attractive appointments.

Over and above the more prosaic aspects of amalgamation, amore fundamental and still unresolved issue has arisen. In manycases small urban communities and far-flung rural communitiesare located long distances, often more than 50 km, from the newmunicipal headquarters. What is the most suitable relationshipbetween the municipal head office and the outlying areas –especially other towns – within the jurisdiction of a singlemunicipality? Should significant developmental capacity belocated within municipalities’ branch offices? Should branchoffices have some degree of devolved functions and develop-mental autonomy? This issue of decentralised administrativeactivities is an important one since it increases the accessibilityof the municipality to far-flung rural communities. Longdistances are prohibitive, especially to poorer residents, and this


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undermines developmental initiatives and co-ordination.Attention needs to be given to keeping sufficient front-line staffin the outlying areas, who can deal with payments issues andqueries, and provide technical operations and maintenance(O&M).

The issue of spatial organisational structuring is of greatimportance, especially when developmental programmes andprojects are contemplated in the outlying areas. Strong projectmanagement skills, and adequate qualified and competent staff,are required to drive and guide development projects. Whendevelopment projects are launched, especially in poor commu-nities, a great deal of hands-on guidance is needed. Develop-ment officers need to build up community committees, definethe tasks and functions of various stakeholders, develop localleadership, provide administrative support, assist with conflictmediation and engage in all kinds of troubleshooting. Suchdevelopmental functions are difficult to implement from amunicipal headquarters located more than 50 km distant.

Despite such pressures for the spatial devolution of functionswithin municipalities, this issue has not been put on theagenda. Most municipalities are still too engrossed in amalga-mating the administrations of the erstwhile local governmentsto think through the far-reaching implications – in particular,the developmental tasks and staff required – for the imple-mentation of their IDPs.At a more fundamental level, however,there is a lack of political clarity about the merits of devolutionof functions. In some municipalities, councillors believe thatspatial devolution will amount to some kind of fragmentationor balkanisation of communities within their municipality.Clearly, some investigation and debate are required about themerits and problems associated with the spatial distribution ofmunicipal capacity and functions.

One possible solution is to create strong branch offices,managed by multi-skilled development managers, who areresponsible for implementing development projects withintheir localities. They should be supported by strong municipalline departments (such as engineering services, social services,

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administrative support and financial management), located atthe municipality’s head office. Some type of ‘matrix’administrative structure is then required, whereby develop-ment officers in the localities can draw on the support of themunicipal line departments, within specific developmentprojects.

Such an approach will require two types of capacity-building – multi-skilled development management, as well asstrong specialist line departments. In addition, municipalmanagers must exert a strong integrative force in order tosecure consensus and co-operation between the spatially-based development officers and the head office staff of themunicipal line departments. Such municipal managers need tohave sufficient developmental knowledge and experience, aswell as appropriate personal qualities, to integrate the spatialand vertical lines of authority within the municipality.

Powers and functions: ‘district’ and ‘local’ roles

South Africa has two ‘tiers’ of local government: districtmunicipalities and local municipalities. Traditionally, districtmunicipalities5 have had very limited functions, viz. allocationof capital grants (derived from their levy revenue) tomunicipalities, and management of a few district-level ‘bulk’functions (eg. large-scale water supply). The allocation ofpowers and functions is now under review. This matter isparticularly pressing in view of the fact of the re-demarcationof local governments, and the consequent hotchpotch ofdistrict and local government functions which have to bestreamlined. Especially in rural areas, where rural councils,assisted by district councils, used to be responsible formunicipal services, the position with regard to service deliveryis very unclear and often quite chaotic.

There are two contrasting points of view with regard to thefuture role of district and local municipalities.


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District municipalities as the primary developmental tier Thefirst perspective is that most developmental functions shouldbe concentrated at district municipality level. This has threekey advantages. First, it is more cost-efficient to build updevelopmental capacity at the 47 district municipalities, ratherthan at the 231 local municipalities. Second, it enables adegree of redistribution from the wealthier towns within adistrict municipality’s jurisdiction, to poorer areas.Third, somedevelopment functions are best addressed at district-widelevel. Some functions involve several local municipalities (eg.district-based tourism), whereas other functions can be doneat scale if done within several municipalities simultaneously(eg. rapid roll-out of sanitation projects).

Local municipalities as the primary developmental tier A con-trasting point of view holds that as most developmentalfunctions are labourintensive, a great deal of personal contactbetween programme managers and communities is required.This would entail a primary role for local municipalities (and,possibly, for branch offices of local municipalities). Manydistrict municipalities are simply too geographically large forsuch a function.

An additional argument is that the main virtue of localmunicipalities is precisely that they are ‘local’, i.e. betterattuned to the specific needs of localities. Local diversity mayrequire different local developmental policies and pro-grammes and, ultimately, local municipalities should bepolitically answerable to their communities for thedevelopmental choices they make. This argument puts thedevelopmental ball squarely within the local municipalities’court.

The two arguments both have their merits. Some nationaldepartments have already stated their preferences. TheDepartment of Water Affairs and Forestry prefers to bestowthe designation of ‘Water Services Authorities’ on districtmunicipalities; and the Department of Provincial and LocalGovernment (DPLG) is allocating special financial support to

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building district-level planning capacity.6 In contrast, thesystem of intergovernmental fiscal allocations, and thedistribution of ‘equitable share’ revenue7 is still being channel-led to local municipalities. However, a recent court rulingmaintained that there is no justification for excluding districtmunicipalities from their part of the equitable share8. It istherefore possible that this will strengthen their claim tobecome the primary developmental tier of local government.

In 2001, the Municipal Structures Amendment Act waspassed, which amended Section 84(1) of the MunicipalStructures Act. Under the new Act, four key local functions(water, sanitation, electricity and environmental health) werere-allocated to district governments. These provisions are notcast in stone (some exceptions are allowed) and they did notcome into operation immediately. A transition period of twoyears was provided for the provincial governments toauthorise the final allocation of functions to district and localgovernments, according to the prevailing conditions in therespective provinces. In the meantime, the Department ofProvincial and Local Government did a capacity assessment ofdistrict and local governments to decide which local functionsshould be reallocated to district municipalities.9 It was decidedthat, where district municipalities are weak and local muni-cipalities strong, the Section 84(1) district functions will bekept at local level; and conversely, where local capacity is weakbut district capacity is strong, then even local functions may belocated at district level. This creates quite a flexible matrix ofpossibilities.

However, two additional considerations need to be raised.The first is that the current capacity of municipal governmentshould not necessarily be the sole (or even the main) conside-ration, in the allocation of functions. A different approachwould be to consider the nature of a function, and the type ofdevelopmental activities associated with it. For example, ‘hard’(infrastructural) services may be more effectively delivered ata district level (i.e. ‘at scale’), whereas ‘soft’ (human) servicesmay be more appropriately placed at local level. A different


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example is the case of LED: attracting investment capital maybe more effectively done at district level (i.e. marketing thedistrict as a whole as an investment destination), whereaspoverty alleviation projects may be better placed at local level(i.e. promoting close interaction with indigent individuals orgroups of poor people).

The second issue is that the administrative costs of the re-allocation of functions should not be underestimated. Thisinvolves the re-allocation of staff, often to institutions withdifferent salary scales and benefits. It also involves theseparating out of municipal revenue into separate ring-fencedfunctions – a process notoriously difficult in municipalities,where complex systems of cross-subsidisation among func-tions have evolved over the years. Many municipal officialshave job descriptions that range across several functions. Forexample, to re-allocate water services from local to districtmunicipalities would mean that the local municipalities lose avaluable source of operating revenue, and may well mean theloss of staff members who were responsible for maintainingwater services as well as maintaining storm water drainage orwater infrastructure on municipal commonage. It is extremelydifficult to dismember various existing municipal functions forthe sake of re-allocating them to another tier of local govern-ment.

This argument implies that, all things being equal, it isprobably preferable to leave existing functions where they are(assuming that they are being performed adequately) and tobuild additional and complementary functions at the other tierof local government. For example, where a function is beingperformed tolerably well, but not optimally, by a local munici-pality, it may be possible to build up district-level supportfunctions to complement and support the operations of thelocal municipality (eg. training, planning or monitoring andevaluation capacity). The Department of Provincial and LocalGovernment has already recognised such an eventuality:‘Some functions might need to be split with some aspectsindicated for partial adjustments.’10

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There is an urgent need for a function-by-function andissue-by-issue assessment of appropriate allocation of responsi-bilities. It is quite possible that one function (eg. transport)should be largely located at district level, while anotherfunction (eg. poverty alleviation) should be primarily locatedat local level. Some functions (such as environmental manage-ment) would cross the district – local divide in several ways,depending on specific issues and problems. For example, airpollution may need to be addressed at district level, whilestreet littering may be regarded as a local issue. Presumably theDPLG would lead the debates and negotiations with variousnational and provincial line departments so that appropriateoutcomes can be ensured for each sector.

Creating a support system for local government

Municipalities’ lack of capacity has often been identified as acrucial blockage in delivery. Until now, very few national linedepartments have taken much effort to pinpoint the actualfunctions which should be devolved to local government –much less apply their minds to taking concrete steps tobuilding municipalities’ capacity. There are two majorexceptions. The Department of Provincial and Local Govern-ment has initiated several programmes to evaluate munici-palities’ performance, identify problems and provide trainingand support.11 The Department of Water Affairs and Forestry(DWAF) has consistently advocated the building of municipalcapacity in water and sanitation delivery. These departmentsshould serve as models and examples for other line depart-ments to follow.

What, then, of other sectors? Several sectoral line depart-ments are responsible for functions (at national and provinciallevel), which also fall within the Constitution’s definition ofmunicipal functions.12 Municipal health, environmentalmanagement, economic development, transport and tourismare only some of the functions that straddle national,


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provincial and local boundaries. In many cases, municipalitiesdeal with such functions in an ad hoc and piecemeal way,without policy guidance, technical advice or training beingprovided by national or provincial departments.

With the expansion of municipal responsibilities – in termsof the new philosophy of ‘developmental local government’, aswell as in terms of their new jurisdictions – municipalities arerequired to undertake an increasing number of functions. Take,for example, land management. Many municipalities areresponsible for commonage development (land owned by themunicipalities themselves). Until recently, commonage landwas typically rented out to nearby commercial farmers. Thisprovided a reliable and indispensable flow of revenue to themunicipalities, at minimal financial cost or administrativeoverhead. In terms of the developmental mandate of munici-palities, they now have to end these lucrative rental contracts,and use the commonage land for indigent township residentsto improve their food security, and possibly serve as a basis forindividuals’ capital accumulation as emergent farmers. Thisshift of focus has placed enormous administrative burdens onmunicipalities in terms of project management, interactionswith community committees, and infrastructure provision andmaintenance. To make matters worse, the use of commonageby emergent farmers has usually meant the loss of land rentals– partly because the level of rent is set at a much lower ratethan for commercial farmers, and partly because payment byemergent farming groups is often unreliable.

Where, then, should a municipality turn for support? Threeobvious candidates are the provincial Departments ofAgriculture (to provide technical agricultural advice andtraining), the provincial Departments of Economic Affairs (toprovide entrepreneurial training and support), and thenational Department of Land Affairs (to assist municipalitiesto set up new systems of land management, in terms of its landreform policy). Very little support has been forthcoming fromany of these departments. The Department of Land Affairs hasbeen willing to make capital funding available for the purchase

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of additional municipal commonage, but no department has asyet provided management support. District municipalitieshave played no role whatsoever since land management hasnever been a district-level function. In this void, municipalitiesare left to flounder – with deleterious political consequencesas community organisations become aggrieved by the apparentlack of municipal support for their developmental needs.

The same void characterises other developmental initiatives.The Department of Provincial and Local Government hasmade large grants available to municipalities to promote LED.Various entrepreneurial projects have been launched. However,very few municipal staff – if any – have any experience inentrepreneurial support. Many of these projects haveencountered severe difficulties as community members battleon by themselves to keep their micro-businesses afloat, andmunicipalities stand by helplessly, lacking the staff, time andskills to intervene meaningfully. There is a clear responsibilityon the part of provincial Departments of Economic Affairs toprovide such support.

There is an increasing emphasis on entrepreneurship develop-ment in all manner of projects.Water, sanitation and community-based public works projects and housing schemes are allincreasingly promoting the development of emergent entrepre-neurs as a useful by-product of infrastructure provision.However, the ‘emergence of an entrepreneur’ is not a simple orobvious process. Even where community members do havetechnical skills (eg. building or plumbing) that is a far cry frombeing able to write tenders, manage cash flows, secure paymentfor services, interact with clients, make business decisions andmanage labourers. Many emergent entrepreneurs lack basicoffice infrastructure. Entrepreneurship development is not forthe faint-hearted. There is a glaring need for municipalities, interms of their developmental mandate, to set up businesssupport centres. However, they lack the funding for this – andeven if grant money was made available for the construction of abusiness centre, there are still the problems of covering theongoing operating costs, as well as finding suitable staff for such


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centres. How will municipalities cope with this, if they are notassisted directly by Departments of Economic Affairs?

The same applies to environmental management. Increasingly,municipalities are required to take into account the environ-mental aspects of development decisions. Municipalities are evenrequired to draft Environmental Management Plans. Interna-tional programmes such as Local Agenda 21 require thatmunicipalities include environmental issues in virtually allaspects of their functioning, from the design and maintenance ofinfrastructure to the creation of livelihoods and povertyalleviation projects. Currently, very few municipal staff have anybackground in environmental management. The most suitableofficials are environmental health officers (EHOs), who areusually trained to deal with a very narrow interpretation ofenvironmental health (eg. the inspection of public food facili-ties). The EHOs are well placed to become more multi-skilleddevelopmental officers, and they would have a natural benttowards environmental questions. But a degree of retraining isrequired, to reconceptualise environmental issues and to showhow such issues can be brought to bear on water, sanitation, solidwaste removal, land management, agricultural and poverty-alleviation projects.

Once again, where should municipalities turn to for supportwith regards to their environmental responsibilities? Theprovincial Departments of Environmental Affairs are the idealcandidates. As yet, however, those departments have done verylittle to support municipalities.

There are numerous types of support which national andprovincial line departments can provide. The following list iscertainly not complete but as a basic guideline, departmentsshould:

• provide policy guidance to councillors, in the drafting ofmunicipal policies and developmental plans;

• assist councils to identify suitable projects;• tailor their own budgets to support councils in the

implementation of such projects;

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• assist municipalities to secure donor funding for projectsand programmes;

• provide ongoing mentoring, guidance and training tomunicipal staff members;

• make extension officers available to assist municipalities inthe implementation of projects; and

• assist municipalities with the monitoring and evaluation(M&E) of projects and programmes.

In sum, each sectoral line department (eg. Water Affairs, LandAffairs, Transport, Health, Housing, Environmental Affairs,Agriculture, Economic Affairs, Labour, and Minerals andEnergy) should have a local government development branch,staffed with officials who have knowledge of municipallegislation and the style of municipal functioning.

Intergovernmental fiscal allocations

This chapter has highlighted the additional municipal capacitythat needs to be built in order to achieve an institutionalframework for sustainable development at local level.Currently, there are several sources of national funding formunicipalities:

• the Equitable Share, originating from National Treasury,which is provided to municipalities to subsidise themunicipal accounts of indigent residents;

• municipal infrastructure grants, Community-based PublicWorks Grants, and LED funding, originating from theDepartment of Provincial and Local Government;

• Local Government Support Grants, originating in theDepartment of Provincial and Local Government, andaimed at municipalities experiencing severe financialproblems, to strengthen their financial managementcapacity;

• capital grants made by the Department of Water Affairsand Forestry;


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• National Electrification Programme grants, originating inthe Department of Minerals and Energy;

• Municipal Capacity-building Grant, primarily for 33 PIMScentres throughout the country;

• Integrated Rural Development Programme Managementand Implementation Grants, targeted at 13 ruraldevelopment nodes; and

• urban renewal projects.

While these grants address various aspects of the develop-mental challenges of municipalities, none of them providegeneral financial support for the new developmental mandateof local government – i.e. to implement a variety ofprogrammes and projects identified in IDPs.

There are important new overhead costs which municipa-lities will need to bear, in order to implement their IDPs.Previous sections in this paper suggested that programme andproject management capacity will need to be built, and willprobably require new staff – preferably with professionalqualifications in development management. Municipalitieswill also need spatially-based branch offices to drive develop-ment projects in remote areas.

In addition to general development management staff,municipalities will also need to re-orient various specialists(eg. librarians, environmental health officers and technicalstaff) in more developmental approaches to their tasks. Thispaper also argues the urgent need for national and provincialline departments to provide support (staff, technical advice,policy guidance) to municipalities to launch coherentdevelopmental programmes and projects. Two additionaltypes of intergovernmental financial flows therefore have tobe created:

• general development capacity, to fund new posts atmunicipal level (for development officers, programmemanagers and project managers). This can be done on thesame precedent as the funding for the PIMS centres; and

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• sectoral support by line departments, for provincialsupport staff, local government staff, regular meetingsbetween departments and municipalities, retraining, help-desks, etc.

The implications of implementing IDPs are only now becom-ing evident. If additional funding streams are not provided,municipalities will experience their new developmental roleas nothing other than a huge unfunded mandate.

Conclusion

Municipal governmental and governance capacity will needto be the bedrock on which the rest of the developmentaledifice is founded. At this stage, municipalities’ internal capa-city is extremely limited, and often inappropriate to a broaderdevelopmental role. Municipalities also need policy guidanceby other governmental agencies (such as line departments) toredesign their policies and programmes, and only then willthe ‘governance’ aspect of municipalities become realistic.Relationships with development partners and stakeholderscan only be built once municipalities know what policyoptions are available, and what programmes are suitable fortheir localities.

A great deal of effort needs to be expended by national andprovincial departments to build up municipal developmentalcapacity. This will involve the following:

• national and provincial line departments must assess thecontent of municipal IDPs, and draft a preliminary estimateof the developmental capacity to implement the variousprogrammes and projects identified within the IDPs;

• a consultative process between national and provincialgovernments should be undertaken to determine thecontributions of various line departments to municipalcapacity-building; and

• municipal development management should be costed(eg. funding development officers’ posts), and the Finance

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and Fiscal Commission should be approached to investi-gate possible additional intergovernmental transfers topay for these additional municipal overheads.

These interventions will help to design an intergovernmentalsystem that is equal to the developmental task. This system willprovide the wherewithal for fulfilling the developmentalmandate – to create an instrument capable of building effectiveco-operative relations between the three spheres of government,and capable of the task of animating municipalities to becomereal development facilitators.

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Notes

1 Act no. 117 of 1998: Local Government: MunicipalStructures Act, 1998.

2 Act no. 32 of 2000: Local Government: MunicipalSystems Act, 2000.

3 This was the second major re-demarcation in five years.In 1995, the 1 260 racially-defined municipalities wereamalgamated into 843 District Councils, TransitionalLocal Authorities and Transitional Rural Councils.

4 This includes six metropolitan municipalities, 47 districtmunicipalities and 231 local municipalities.

5 Before December 2000 they were known as DistrictCouncils.

6 This involves the creation of Planning and Implementa-tion Support Centres, located at district level, andanswerable to district municipalities, even though theyare not part of district municipalities’ staff establish-ments. The main function of these centres is to supportlocal municipalities’ IDP planning processes.

7 Municipalities’ portion of the grant funding dispensedby National Treasury to provincial and local govern-ments.

8 Uthukela, Zululand and Amajuba District Munici-palities v. the President of the Republic of South Africa.

9 Local Government Law Bulletin, April 2001.

10 Department of Provincial and Local Government’s ‘Princi-ple 3’. See Local Government Law Bulletin, April 2001.

11 For example, Project Viability is aimed at identifyingmunicipalities in financial crisis. Through the provincialDepartments of Local Government, consultants areappointed to assist municipalities to set matters right.

12 See Schedules 4 and 5 of the Constitution.


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