Local Government Overview

The White Paper on Local Government

(Executive Summary Extract)

Apartheid has fundamentally damaged the spatial, social and economic environments in which people live, work, raise families, and seek to fulfil their aspirations. Local government has a critical role to play in rebuilding local communities and environments, as the basis for a democratic, integrated, prosperous and truly non-racial society.

The Constitution of the Republic of South Africa (1996) mandates local government to:

• Provide democratic and accountable government for local communities.

•  Ensure the provision of services to communities in a sustainable manner.

• Promote social and economic development.

• Promote a safe and healthy environment.

• Encourage the involvement of communities and community organisations in the matters of local government.

Local government must also promote the Bill of Rights, which reflects the nation’s values about human dignity, equality and freedom, and uphold the principles enshrined in the Constitution.

Within the framework of the Constitution, this White Paper establishes the basis for a new developmental local government system, which is committed to working with citizens, groups and communities to create sustainable human settlements which provide for a decent quality of life and meet the social, economic and material needs of communities in a holistic way.

Section A: Current Reality, provides a brief history of local government under apartheid, which points to the origins of many of the problems currently faced by local government in South Africa. It highlights our history of community mobilisation, and locates the current transition process in its broader historical context.

This section also provides an outline of the current local government system, and discusses the specific strengths and weaknesses of the different models of transitional municipality created under the Local Government Transition Act. It points to the need for systems of metropolitan government which ensure that Metropolitan Councils have sufficient powers to fulfil their intended role; and to the need for flexibility in local government systems outside of metropolitan areas to accommodate the vastly different settlement types (ranging from large secondary cities to sparsely populated rural areas) which fall within the District Council system.

It also sketches the existing settlement patterns and trends in the country, and highlights the particular challenges which South Africa’s unique settlement patterns pose for the new local government system.

The second section of this White Paper, Developmental Local Government, puts forward a vision of a developmental local government, which centers on working with local communities to find sustainable ways to meet their needs and improve the quality of their lives.

It discusses four characteristics of developmental local government, namely exercising municipal powers and functions in a manner which maximises their impact on social development and economic growth; playing an integrating and coordinating role to ensure alignment between public (including all spheres of government) and private investment within the municipal area; democratising development; and building social capital through providing community leadership and vision, and seeking to empower marginalised and excluded groups within the community.

It urges local government to focus on realising developmental outcomes, such as the provision of household infrastructure and services; the creation of liveable, integrated cities, towns and rural areas; and the promotion of local economic development and community empowerment and redistribution.

It also provides three approaches which can assist municipalities to become more developmental, namely integrated development planning and budgeting; performance management; and working together with local citizens and partners. It emphasises the potential of integrated development planning as a mechanism to enable prioritisation and integration in municipal planning processes, and strengthen links between the development and institutional planning processes. It proposes a process for the development of a performance management system for local government; and suggests ways in which municipalities can engage citizens and community groups in the affairs of the municipality in their capacities as voters, citizens affected by municipal policy, consumers and end-users of municipal services, and partners in resource mobilisation for the development of the municipal area.

The third section of this White Paper, Cooperative Government, situates local government within a system of cooperative government. It notes that, under the new Constitution, local government is a sphere of government in its own right, and not a function of national or provincial government. While acknowledging that the system of intergovernmental relations requires further elaboration, the section provides a preliminary outline of the roles and responsibilities of national and provincial government with respect to local government. It also provides a summary of national departmental programmes which impact on local government, and notes that local government is increasingly being seen as a point of integration and coordination for the delivery of national programmes.

This section concludes with a discussion on the role of organised local government, and horizontal relations between municipalities.

Section D deals with municipal institutional systems. It begins by highlighting the particular needs and circumstances which South African municipal institutions must cater for.

It then focuses on metropolitan municipal institutions, and puts forward three key motivations for the retention of metropolitan government systems in metropolitan areas, namely that metropolitan government provides a basis for socially just and equitable metropolitan governance, enables strategic land-use planning and coordinated public investment, and the development of a city-wide framework for economic and social development within the metropolitan area.

Two types of metropolitan government are proposed: Metropolitan government with metropolitan Substructures, and metropolitan government with Ward Committees.

The system of metropolitan government with metropolitan Substructures caters for metropolitan areas where a structured correspondence between political and administrative decentralisation is desired. The system of metropolitan government with Ward Committees allows for maximum administrative flexibility, but ensures that diversity within the metropolitan community is given a voice through the establishment of decentralised Ward Committees.

The paper then discusses municipal institutions outside metropolitan areas, and motivates for a system of district government with responsibility for district-wide integrated development planning, infrastructural development, the provision of technical assistance to category (B) municipalities, and the direct provision of some municipal services in areas where category (B) municipalities lack the capacity to perform all municipal functions.

Three forms of category (B) municipality are proposed, namely urban municipalities, rural municipalities, and amalgamated urban-rural municipalities. Although the paper does not allow for the continuation of the existing Transitional Representative Council system or the “Remaining Area” system, it recognises that not all rural municipalities will be able to assume the full range of municipal powers and functions, and that, in a few exceptional circumstances where the establishment of category (B) municipalities are completely unviable, the district government may assume direct responsibility for the delivery of all municipal functions in the area.

The relationship between traditional leaders and local government is discussed. A cooperative model is proposed whereby traditional leadership will have representation on Category (B) and (C) municipal Councils. This model will apply in all areas of traditional leadership.

This section of the White Paper concludes by outlining the criteria for the demarcation of municipal boundaries.

The next section of the White Paper is concerned with municipal political systems, and begins by highlighting the importance of dynamic local political leadership.

It discusses the advantages of allowing for the delegation of executive powers by a municipal Council to either an Executive Committee or an Executive Mayor, and proposes that both options are accommodated.

The paper notes that Section 155 of the Constitution envisages some further differentiation between municipalities in addition to the different categories of municipalities provided for. It is proposed that municipal political systems provide a basis for such differentiation, and for the development of municipal types.

This section concludes by proposing a mixed municipal electoral system where the proportional representation component is geared to adjust distortions in representivity, and proposes an approach to reducing the number of municipal councillors.

The seventh section of this White Paper introduces the issue of municipal administrative systems. It notes that the local-level transition process has largely been concerned with the amalgamation of previously separated municipalities, and that significant changes to administrative systems have not yet taken place.

The bulk of this section focuses on service delivery systems, and a wide range of approaches to transforming municipal service delivery systems are put forward. While certain national interventions (such as the development of a regulatory framework for municipal public-private partnerships) are required to enable municipalities to utilise the full range of options available, each municipality is encouraged to develop its own institutional transformation programme and adopt the options which are best suited to its circumstances.

This section of the White Paper also outlines proposed changes to the local government training system, and stresses the pivotal role that the South African Local Government Bargaining Council will play in enabling the transformation of municipal administrative systems.

This section of the White Paper deals with municipal finance. It sketches the current situation, noting that while the aggregate size of the municipal budget in South Africa is significant, totaling over R48bn this year, there are vast disparities between the revenue-bases of different municipalities.

The paper puts forward a set of principles to guide the development of a new framework for municipal finance, and then elaborates the key aspects of that framework.

These include local revenue instruments and policies, where it is noted that while existing sources of municipal revenue should remain, some regulation of the property taxation system and the regional and establishment levies is required. Additional sources of revenue, such as a fuel levy and the extension of property taxation to rural areas, are explored. Municipalities are encouraged to develop clear tariff policies and credit control mechanisms, to ensure that poor households have access to basic services and that services are provided on a sustainable basis.

The second aspect of a framework for municipal finance discussed in the paper is intergovernmental transfers. The paper distinguishes between agency payments, capital transfers, and transfers to fund operating costs. The latter system is currently inconsistent and inequitable, and will be restructured to introduce a formula-based system of transfers which will constitute the “equitable share” of national revenue to which local government is constitutionally entitled. The “equitable share” will be structured in a manner which enables all municipalities to provide a basic level of services to low-income households in their areas of jurisdiction at an affordable cost.

The final aspect of a framework for municipal finance addressed in the paper is leveraging additional investment in the municipal sector. Private sector investment in municipal infrastructure is required to meet the costs of inherited backlogs, and interventions to enable the involvement of both private sector institutions and public sector financial intermediaries are discussed.

This section concludes with a discussion of municipal budgeting, accounting, financial reporting and management systems, including generally accepted accounting practices, reserves, capital accounting, and internal and external reporting. It stresses the need for accurate financial information to enable sound financial management, private sector investment, and community involvement in municipal budgeting systems.

Finally, this White Paper puts forward an approach to municipal transformation. It notes that national government is committed to developing a stable and enabling framework in which change can occur, and providing a range of support mechanisms to assist municipalities during the transition. However, transformation ultimately rests in the hands of each municipality. Municipalities are encouraged to think critically about how they operate and relate to local communities, and to develop their own strategies for meeting local needs and promoting the social and economic development of communities in their areas of jurisdiction.

Strong and capacitated developmental local government has a substantial contribution to make to improving South African citizens’ quality of life, and to the development of the nation. This White Paper outlines the systems which will make developmental local government a reality.

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