Audits Require Action from all of Society

Michael Sutcliffe and Sue Bannister, City Insight (Pty) Ltd

Each year around this time the Auditor-General releases the composite report of audit outcomes across the country’s 257 municipalities. This is a very important document, but unfortunately media attention provides only a few headlines for a day or two and then we carry on as if it is the same old, rather depressing, story.

Audits: Local Government Audit Outcomes Raise Concerns Over Financial Health and Service Delivery

In her Consolidated General Report on audit outcomes of local government for the 2022-2023 financial year, Auditor-General (AG) Tsakani Maluleke reported, correctly, “on weaknesses in service delivery planning, reporting and achievement; failing municipal infrastructure; and the increasing pressure on local government finances due to a lack of careful spending, compounded by councils not paying sufficient attention to these matters… Unfunded budgets and high unauthorised expenditure clearly show the weaknesses in financial planning. As a result, the financial health of municipalities remains weak”.

All of this impacts on services not being delivered, creditors not being paid, and debts such as to ESKOM and Water Boards escalating. Of course the impact on businesses and the economy is severe.

The AG’s argument continues that the three main weaknesses that hold back local government progress are:

• Inadequate skills and capacity,
• Governance failures and
• A culture of no accountability and consequences.

It is critical that her call to action to redress this unacceptable situation becomes a call to all of society to not only demand changes but to help in bringing about the changes we need.

Call to Action: Addressing the Financial Crisis in South Africa’s Local Government

Let us contextualise the AG’s audit outcomes because the reality is that there are significant differences across municipalities. For example, there are 27 municipalities which, in the year under consideration, spent almost R340 billion on operations and R30 billion on capital. This total expenditure of some R370 billion is almost 75% of all monies spent by the 257 municipalities. These 27 municipalities range in size from Stellenbosch (175000 people) to Johannesburg (around 4.8 million), and collectively they are our major economic centres. National Treasury pays particular attention to these 27 municipalities each year when reviews of their medium-term and mid-year budgets are undertaken.

Whilst we should expect that all of these major municipalities have the requisite professional capacity to receive at least unqualified audits, 14 of these 27 largest municipalities received qualified audits or worse, with one (Madibeng) receiving an Adverse finding.

Now let’s look beyond this using the index developed by National Treasury which measures financial distress in each municipality every quarter and which allows one to track how each municipality is able to pay for operations, such as the purchase of water and electricity. The index ranges from 0 (no immediate financial challenges) to 4 (where a municipality is in serious financial distress) in terms of Sections 138 and 140 of the Municipal Financial Management Act.

Financial Distress in South Africa’s Major Municipalities: A Growing Concern

Sadly, only one of these 27 municipalities (George) had no triggers for financial intervention in the 2022-2023 year. Over the past ten years, more and more municipalities have fallen in terms of the criteria used to determine serious financial problems in terms of Sections 138 and 140 of the MFMA.

Holding Local Government Institutions Accountable: A Call for Urgent Action

So our first call to action must be to the institutions which have the mandate to monitor local government and ask them to be responsive and take urgent action which will result in real change. These actions do not have to be as drastic as implementing Section 139 interventions or installing administrators, but could instead focus on actions such as stopping payments of performance bonuses, not allowing the appointment of senior managers who do not have the requisite experience or professional qualifications, intervening when Municipal Staffing Regulations are not complied with, calling for specific consequent action against managers who are responsible and/or accountable, and so on.

The real effectiveness of these actions must also be continuously evaluated and reassessed, as there are currently many actions being undertaken which are not having the requisite effect. For instance, there is a need to assess why National Treasury’s compulsory courses in competence for all senior management, in areas such as governance, finances and ethics are not resulting in meaningful change in corruption and mismanagement.

In addition, National Treasury by law must receive reports from municipalities on matters of serious financial transgressions. We must ensure that these are being actively reviewed, and actions taken with all arms of justice to ensure that particularly criminal investigations are urgently dealt with and prosecutions prioritised.

Promoting Transparency in Local Government: A Call for Citizen Engagement

Our second call to action must be on building transparency. Imagine if every municipality provided on its website the cost of outsourced service delivery, such as the use of contractors and what it is costing us each time they get called out to undertaken repairs in each of our wards. Not only will we be able to monitor whether or not they have actually performed such services, but we could all ensure there is value for money as we start seeing where and how our money is being spent.

Recognizing Achievements and Promoting Efficient Spending in Local Government

Third, we must also acknowledge the good work happening within our municipalities. This should look at the areas in which there have been accomplishments achieved through existing budgets and programmes, rather than solely concentrating on the shortcomings. All governments have to make difficult choices, and a key area needing greater focus is how to ensure funds are being spent efficiently, economically, and effectively. Municipalities spend more on public infrastructure compared to provincial and national governments (excluding major state-owned entities), and whilst it is true that some of this spending may not be well spent, it is important to remember that the majority of expenditure is vital for providing necessary services and infrastructure.

Addressing Budgetary and Expenditure Challenges in South Africa’s Local Government

At the same time, we must also give consideration to some worrying trends in budgetary and expenditure patterns in municipalities. These include under-expenditure, a decline in the ratio of funds spent on capital projects and the reduction in repairs and maintenance expenditure. By way of example, in 2012/13 approximately R35 billion remained unspent by municipalities. This grew to R71.4 billion in 2022/23, representing 12% of the overall municipal budgets which remain unspent. Many of the key factors behind this include poor budgeting, reduced revenue collection and poor management. There has also been a decline in the ratio of expenditure of operational to capital expenditure. In 2012/13 almost 20% of the aggregate expenditure was on capital projects, but by 2022/23 this has declined to only 12% being spent on capital projects. This decline has meant that less infrastructure is being developed. And, at an operational level, repairs and maintenance expenditure patterns have remained low and in many cases have declined. This is an important factor behind water losses, electricity outages, sewerage spills and so on.

Improving Leadership, Transparency, and Consequence Management in Local Government

The solutions to this poor budgeting, expenditure and implementation needs more specific analysis of each municipality, but they include improving leadership, particularly at an administrative level, improving transparency and consequence management, and including support provided to reverse these trends. In this regard municipal officials must account for what is not being done by starting with what is already budgeted for.

Promoting Accountability and Collaboration in Local Government

Finally, we must collectively ensure that senior management are far more responsive, and that they should be held to account by their Councils when they have failed to carry out their duties.
Overall, these are relatively simple strategies requiring an all of society approach, working with our municipalities to promote the vast amount of good being done, and to also reverse the unwelcome trends.

Read our Articles

Electoral Democracy, Proportionality and Building Coalitions

Managing Elections in South Africa: Context and Challenges

Electoral Democracy, Proportionality and Building Coalitions

Michael Sutcliffe and Sue Bannister (Directors: City Insight (Pty) Ltd)

From Apartheid to Inclusivity

Over the past 30 years, we have come a long way towards building a non-racial, non-sexist, and united South Africa.  Whilst our constitutional system, built on human rights, has been critical to that process, ensuring inclusivity in the political system has played a major role too.  The ANC’s constitutional proposals in the late 1980s started the process towards proportional representation, but all major parties to the negotiations in the 1990s accepted that a proportional system is best for our country as compared to a first-past-the-post system on which apartheid’s governments were based.

Tendency towards Hung Legislatures within proportional representation systems.

Students of electoral systems then, and South Africans as a whole now, have come to realise that in all proportional representation systems, there is a tendency towards hung legislatures where no party has a majority of seats forever. The simple reason for this is that proportionality means that all votes cast have a chance of leading to a person or party being elected and having a seat in the respective legislature. And democracy means political leaders are free to change parties and voters are free to vote for whoever they like.

The most recent national and provincial elections demonstrate this where the ANC, who has been a majority party at a national level in the previous six elections, has had its support reduced to just over 40% of the vote.  The top eight parties receiving at least 1% of the overall votes collectively received almost 95% of the votes across South Africa.  Another 10 parties managed to win seats in the National Assembly with less than 1% of the votes. It is important to note that some 34 parties who participated in the national elections received in total around 2% of the votes, but none of these received enough votes to win seats in the National Assembly.

Coalition  Agreements : a  Stabilising Factor

It should be said that hung legislatures do not automatically require coalitions because it is possible to have minority governments where a President or Mayor gets elected without any formal agreement between parties.  However, coalition agreements between parties can stabilise things, particularly if they are not simply attempts to cobble together “kingmakers” to vote in persons into leadership positions.  “Kingmakers”, usually men, are very small parties which when joining forces with a major party, allow the major party to get a majority of legislators but then often make demands serving their own personal interests.

Leadership changes : do they always promote instability?

Changes in leadership are often seen as promoting instability, but this does not always have to be the case.  In the Western Cape, for example, some smaller municipalities have often had frequent changes in Mayors and Speakers without any demonstrable impact on service delivery.  And even in eThekwini, a minority government established after the 2000 elections, and in which we served, had significant political stability in large part because its EXCO consisted of representatives from the major political parties: ANC, DA, IFP, and the MF, all serving under an ANC Mayor, but with full rights to disagree in Council on matters such as the budget.

Cobbling together of coalitions causing an inward focus

Overall, though, in larger municipalities, frequent changes in political leadership have often had an impact on service delivery, because cobbling together coalitions leads to an inward-looking focus where each of the parties in a coalition has specific things they want “delivered” and this works against ensuring there are systems in place to deliver to all based on the approved Integrated Development Plan.

Currently, based on the 2021 local elections, only Cape Town, Buffalo City, and Mangaung of the Category A municipalities have majority parties in charge of their local governments.  The remaining Category A’s (Johannesburg, eThekwini, Tshwane, Ekurhuleni, Nelson Mandela Bay) and another 60 municipalities have “hung” legislatures.   If the elections were held now, based on the 2024 election results, we would have the same situation with the Category A municipalities, but would have 64 local municipalities with hung municipalities.

Hung Municipalities and the challenges

In all of these hung municipalities, and even in municipalities where there is a majority party, there are political, governance and administrative challenges, and in all of them civic organisations and the public at large are left in the dark. The “hung” municipalities often become less responsive, less transparent, less competent, and basic service delivery suffers as a result.

Election Coalition Strategy

Ideally, what we should be asking of all parties contesting elections and then who win seats, is that:

• Before elections they should publish and commit themselves to a set of coalition principles to guide their involvement in any coalitions;
• We legislate that hung councils are given, let’s say, an extra month to finalise coalition agreements before elections for Speakers, Mayors, etc.;
• Except for Directors-General (DG) and Municipal Manager (MM) positions, appointments should not form any part of agreements between political parties, and this should be legislated;
• That DGs/MMs should continue to run administrations whilst coalitions are being finalised;
• Budgets must always be linked to IDPs and not to coalition agreements (in case of municipalities);
• All agreement must be publicly signed and allowance made for communities to respond to agreements.

Stable coalitions and transparency

Stable coalitions do require transparency in their process of formation, particularly ensuring that the many communities of interest (labour, business, civil society, etc) are properly informed of what agreements have been made, and should ideally be provided with an opportunity to comment on such outcomes.

Safeguarding South Africas proportionally representative electoral system

There is no doubt that democracy is under threat internationally.  Not only do we have many countries moving towards more authoritarian states, but over 50 democratic countries are now eroding, experiencing a statistically significant decline on at least one measure of democracy.  The number of recent coups d’état and unconstitutional transfers of power on our own continent is worrying, but in many of those contexts it has resulted from increasing public frustration with corruption, self-serving leaders, etc. That is why, whilst we must safeguard our proportionally representative electoral system, we must also ensure that any risks to the stability of our governments are urgently addressed.

Read some of our other articles:

Addressing the Instability arising from Hung Legislatures

Addressing the Instability Arising from “Hung” Legislatures in South Africa

 

Managing Elections in South Africa: Context and Challenges

Dr. Michael Sutcliffe and Sue Bannister (Directors: City Insight (Pty) Ltd)

Watershed Elections

Although the 2024 National and Provincial election process has yet to be concluded,  it appears to be a watershed in the development of our democracy.   In drafting our Constitution we agreed that firstly, every citizen has the right to free, fair and regular elections. In this regard, we must stand proud that we are about to conclude our twelfth democratic election, for all spheres of government, each held regularly and to date all declared to be free and fair.  This election has extended to National and Provincial elections the right for independents to stand for elections, a right that has to date existed in the 5 local elections.

Electoral System Proportional Representation

Secondly, our Constitution requires that we establish an electoral system which must result, in general, in proportional representation.  In drafting this principle we knew that this was the fairest approach in ensuring that each vote will meaningfully record our diversity and differences in ways that our representatives are not just from parties who may have been first past the post, with the remaining runners having no say in our legislative and executive matters.  All political parties knew in the 1990s in drafting this principle that this was best for our country and would certainly result in legislatures being elected where there is no majority party.  Indeed, this has happened in all local elections since 2000, and in some of our provincial legislatures, but has never happened in the case of the national legislatures (National Assembly and National Council of Provinces).  At the time of writing, this situation will now change, creating a new reality for national elections.

Independent Electoral Commission

Thirdly, our Constitution required an Electoral Commission to run the elections and it must be independent, subject only to the Constitution and law, impartial and must function without fear favour or prejudice. This is easier said than done and because we are a democracy we must be proud of what they have achieved for reasons covered below.  Managing elections as proportionality kicks in with increased contestation is not for the faint-hearted.  Today, such management is particularly challenging as social media takes over our lives and we have to increase our vigilance to distinguish between truth and fiction.

IEC Challenges in 2024

The sheer scale of what the IEC manages is huge and should be appreciated.   And over the voting period this week, there were a wide variety of challenges which had to be addressed by the IEC, SAPS and other parties:

• A few Voting Stations opened late, but almost all had opened by 9am.
• Insufficient measures were available for persons with disabilities.
• Non-functional Voter Management Devices (Scanners), largely due to internet challenges. The IEC ensured that manual scans were used in such cases.
• A few Presiding Officers (POs) not wanting to use the manual scan or change the queueing system. These were addressed through Provincial/National IEC intervention.
• Some Voting Stations had a shortage of some voting material (ballot boxes and materials) as the day progressed where in a few cases area managers were slow to respond.
• Some voters did not appear on the voters roll even when they had updated their details.
• Security incidents to date have resulted in 98 cases being registered with over 50 arrests having been made by SAPS.
• Long queues in some stations particularly in early morning and late evening, but the IEC gave the assurance that anyone in the queue at 9pm was not turned away.
• A few instances of voters being blocked at the gate by other parties refusing them access. This also included a few cases where SAPS stopped voters wearing party regalia but these were addressed as voters are entitled to wear party regalia.
• Some cases where electricity went off.
• Spending an inordinate amount of time with manipulated videos on social media, wrong information or information which was not contextualised being disseminated even by the media and analysts, etc.

 

Almost all of these issues were resolved at a local level, including bringing additional IEC persons into specific stations assist in managing where there were long queues.  It is expected that in time the IEC will detail the root causes of these problems and how they may be mitigated in future although it must be said, for reasons detailed below, some of these problems are due to the geography of human settlements.

There were two issues that existed before but which took a specific form in these elections and these were voters who wanted to vote outside their registered Voting Station and had not applied for these Section 24A applications.  A further issue was long queues and delays in processing voters, a matter which will require the IEC to provide specific evidence on where these were and what the root causes happened to be.

To a large extent, though, these specific challenges seemed to result directly from legislative changes made firstly, to address the need to accommodate independent candidates and secondly to address the need to ensure all voters are registered with an address.  In previous elections independents could not stand, and there were apparently instances where persons voted more than once.  This resulted in legislation which required each voter to receive three ballots, to accommodate independent candidates that are contesting a seat in the region for one of the 200 regional National Assembly seats.

More importantly, though, the challenge of long queues was primarily found in VDs with large numbers of registered voters.  Our own observations across eThekwini and in discussions with colleagues in places like Johannesburg and Buffalo City, was that these were particularly found in inner city and higher educational precincts.

To explain this, we must note that colonialism and apartheid have had a huge impact not only historically on the geography of human settlements, but post-1994 there remain significant movements of people reversing that apartheid reality.  Because our IEC must ensure every voter in South Africa has an opportunity to vote, they have had to configure an arrangement of VDs which mirror that reality.

Examples

Whilst we do not have the space to provide such evidence some of examples include:

 

• The 26,7 million voters are unevenly spread across the nine provinces, with the largest province in South Africa in area being Northern Cape with only 2,7% of the voters and the smallest province in area being Gauteng having the largest number of 23,6% of the voters.
• There are 72 VDs with over 6000 voters comprising in total just under 500000 voters, whilst there are 6828 VDs with less than 500 voters comprising in total over 2 million voters.
• Johannesburg has 865 VDs with each covering an average area of 2 square kilometres, with on average 2674 voters per VD.
• Hantam on the other hand in the Northern Cape has only 23 VDs and the average size of each of these VDs is almost 1700 square kilometres with on average 611 registered voters per VD.

 This is the reality of our country and so the scale of what the IEC has to do to manage its constitutionally required functions cannot be underestimated.

We must remain proud, though, that we are one of the relatively few countries that has an independent electoral commission which has dealt with a myriad of issues, including court actions, complaints, challenges.  Fortunately, it must operate transparently, allowing for a wide range of parties and interests to have their say and be responded to.

 

Addressing the Instability Arising from “Hung” Legislatures in South Africa

Michael Sutcliffe and Sue Bannister (Directors: City Insight (Pty) Ltd)

The municipal electoral system has had five municipal elections, all of which have been declared as free, fair and safe with almost no disruption of the elections. The elections have all been keenly contested, and in the 2021 elections some 324 parties were involved, including also some 1582 independent candidates contesting wards, with 51 winning a seat, out of the over 9000 councillors elected from parties. The 2021 elections were conducted under exceptionally difficult circumstances due to the COVID-19 pandemic. Across the country the major parties, ANC, DA, EFF and IFP, dominated the electoral results.
At the same time, the increasing number of “hung” municipalities from 24 in 2000 to 81 in 2021 has compounded instability.

Figure: Hung councils

Read some of our other articles

Electoral Democracy, Proportionality and Building Coalitions

 

Complex Challenges in Housing the Inner City Poor and Vulnerable

Dr. Michael Sutcliffe and Sue Bannister (Directors: City Insight (Pty) Ltd)

Challenges in Housing in South Africa  | Waking up to news of the tragedy yesterday where over 70 people died, including 12 children, after a fire in a building in the CBD of Johannesburg, we found a blame game at play. Some elements in the media were demanding the Premier and Executive Mayor be immediately available for interviews whilst the emergency response teams were clearly still at work. Others blamed foreign migrants and NGOs for defending in court the right of people to stay in such buildings. Very few seemed to be focussing on the tragedy of such loss of life.

Fortunately, later in the day the immediate responses of those grabbing such attention started calming down. The President’s correct call that it is a wake up call for all of us. That we need an all-of-society approach to address such issues is an important starting point. And the Premier’s Committee of Inquiry will hopefully provide us with a vehicle within which we can collectively unpack not only the immediate causes of this fire and the tragedy that resulted, but how we can address the very complex causes that have created such circumstances.

Fortuitously, the day this tragedy happened Minister Zikalala opened a very important meeting of built environment professionals and academics to work on strategies creating more resilient and sustainable built environments. Organised by one of his entities, the Council of the Built Environment, the deliberations show clearly that we not only have the complex challenges in housing above ground (such as updating building regulations), but also challenges below ground such as ensuring our built environment is structurally safe and sound (for example, changing the codes and formulae used to decide how our stormwater system can deal with run off, etc).

We need a whole-of-society response to ensure that we work towards sustainability in meeting the challenges of climate variability, pandemics, emergencies and disasters.

Challenges in Housing and overcrowded buildings

Challenges in housing and the problem of hijacked and overcrowded buildings in Johannesburg is a multifaceted and intricate issue that involves various social, economic, legal, and political factors. Understanding the complexity of this issue requires an examination of several key aspects.

The first reality is that there is no quick fix solution, and it will unfortunately take us decades to rid ourselves of the historical legacy of apartheid and forced removals, which has contributed to urban inequality, creating an environment where hijacked buildings can thrive. Many people who were previously disenfranchised were forcibly removed and have been left without proper housing and access to economic opportunities.

With the dawn of democracy many left their homes to occupy abandoned or neglected buildings. In many cases workseekers found shelters leading to a growth of over 35% in the number of 1-2 person households in Gauteng as a whole, with most of these people having no other option but to find shelter in informal settlements, backyard shacks, abandoned buildings, etc. Of course, in these circumstances they have to pay for such accommodation, usually to those who “illegally” took over such land or built such unregulated shelters.

Challenges in Housing – over 17000 living in abandoned buildings

Our own experience in eThekwini came from confronting this reality head-on when we found (then) over 17000 people living in 20 “abandoned” buildings. The people were mainly very productive women (with their children) who were making dresses for sale on the streets in Warwick Triangle. They were paying, on average, cash rentals which were double the most expensive commercial property in eThekwini, simply for the right to live in 9 square metres of an abandoned building, with no services.

I called a number of the actual owners of these buildings to my office and they all indicated they had no idea of what was happening and they simply received monthly rents. I am glad to say many of them worked with the city to create sanitary and safe conditions including play spaces on the rooftops.

However these cases are generally slightly easier than dealing with hijacked buildings. In our large cities we are confronted with stark economic disparities. The lack of equitable access to basic services and economic opportunities drives some individuals to resort to hijacking buildings as a means of obtaining shelter, however precarious.

Challenges in Housing & Criminal Activity Hubs

These buildings often become hubs for criminal activities due to the lack of formal governance. Criminal elements can exploit these spaces for drug trafficking, prostitution, and other illicit activities, further exacerbating security concerns.

Hijacked Buildings: A Legal and Ownership Quagmire

Ownership disputes and complex property rights make it difficult to address hijacked buildings effectively. Some properties might have unclear ownership due to historical land injustices, making it challenging to legally resolve the occupation. Evicting occupants from hijacked buildings is legally complex. Balancing the rights of informal occupants with property owners’ rights can lead to prolonged legal battles and uncertainty.

In addition, the time it takes, and challenges experienced when trying to evict people from buildings, creates further problems. Even a task team we established with colleagues from the national security cluster could not fast-track solutions.

Challenges in housing case study : China Mall eTekwini

These delays are not only because of NGOs challenging eviction cases, but a recent example in eThekwini shows the difficulties municipalities have in dealing with such cases. The China Mall in the eThekwini CBD burnt down in January 2022, but even after court orders the property owner has still not demolished the building and so the city of eThekwini has to now pay R28 million to demolish it and try and recover the funds.

Hijacked Buildings: A Health and Safety Crisis

Hijacked buildings lack access to proper infrastructure and basic services, such as sanitation, electricity, and water. This poses significant health and safety risks to the occupants and surrounding community. Illegal connections are often made, or people use gas, candles, paraffin stoves, etc or even open fires in such buildings, including in informal housing, without any safety precautions being made.

The partitions between each space in which each household lives are certainly not compliant with building and fire regulations. Exits are also blocked to ensure the “landlord” collects payments and to stop easy access by governmental officials.

The government’s response to hijacked buildings involves a delicate balance between addressing the housing needs of vulnerable populations and maintaining law and order. As a result government, usually national and local spheres, often work collectively to continue to deliver housing solutions which to date number over four million housing opportunities.

Additional strategies are also often pursued including rehabilitation, formalization, or eviction, each with its own challenges.

Social Dynamics and Negotiation Challenges in Housing with Hijacked Buildings

Unfortunately, too, it is often not easy negotiating with such informal communities that form within hijacked buildings as they develop their own social structures and norms. These dynamics can both provide support for vulnerable individuals and perpetuate challenges in housing such as crime and unsanitary conditions. In eThekwini we had to deal with a sensitive case of a building which had been hijacked by blind and disabled people who correctly argued that often their circumstances were not prioritised in housing delivery processes.

At the same time, it is not only challenges of existing communities, but also of those who profit from such buildings, from the “landlords” to other business interests who want to gentrify the building displacing occupants. The “landlords” who take over the buildings make it impossible for the actual public or private owners of such buildings to even enter them. We believe even in Johannesburg serious questions have been raised about previous initiatives to sell municipal buildings or land and undoubtedly this will also be evaluated by the Committee of Inquiry.

There is no doubt that effectively addressing hijacked buildings requires collaboration between government agencies, property owners, civil society organisations, and affected communities. The biggest challenge to address though is our court system as they often do not give such matters the urgency they deserve, and allow endless delays. Balancing the interests of these stakeholders adds another layer of complexity. When corruption and collusion are added into the mix, the challenges are made more complex.

A Holistic Approach to Johannesburg’s Hijacked Buildings and the challenges in housing

In conclusion, the issue of hijacked buildings in Johannesburg is not only a matter of illegal occupation but a reflection of broader social and economic challenges which requires an all-of-society approach. To comprehensively address this issue, policymakers and stakeholders must consider the intricate interplay of historical, economic, legal, and social factors that contribute to its complexity.

Read our other articles

Municipal Boundary Redetermination

Municipal Boundary Redetermination

Dr. Michael Sutcliffe and Sue Bannister (Directors: City Insight (Pty) Ltd)

What is municipal boundary redetermination ?

What is municipal boundary redetermination and why should we take note of it? Since 2000, when the first municipal boundary demarcations were completed and local government in South Africa, as we know it today, was set up, there have been a number of reviews intended to ensure municipal boundaries reflect the communities they serve, factor in changing patterns of development and movement, and ensure that communities are functional, integrated and receive services equitably.

Making Municipal boundary changes

The Municipal Demarcation Board (MDB), established in terms of Chapter 7 of the Constitution, must determine, and where necessary redetermine, municipal boundaries. In making boundary changes, the MDB needs to base their decision on the criteria provided in Sections 24 and 25 of the Municipal Demarcation Act of 1998. There is no particular prioritisation of the criteria, and the Board has discretion on how to interpret them. The criteria include enhancing:

• Interdependence of people, communities and economies: This includes existing and expected patterns of human settlements and migration, employment, commuting and transport movements, spending patterns, use of amenities, recreational facilities and infrastructure and commercial and industrial linkages;
• Spatial and development planning: This includes the need for cohesive, integrated and unfragmented communities, existing and expected land use, social, economic and transport planning, promotion of social and economic development, integrated development, topographical, environmental and physical characteristics;
• Governance and functionality: This includes provincial and municipal boundaries, democratic and accountable governance, areas of rural and traditional communities, functional boundaries, coordinated municipal, provincial and national programmes and services, effective local governance, provision of services in an equitable manner and rationalisation of municipalities;
• Financial and administrative factors: This includes financial viability, sharing and redistribution of financial and administrative resources, inclusive tax base, administrative consequences of determination.

Process of Accessing municipal boundary redeterminations

There is a clear process in assessing municipal boundary redeterminations.

Firstly, the Board assembles requests for municipal boundaries to be redetermined. Thereafter, the requests were categorised according to the spatial extent or impact of the change on existing municipal boundaries.The MDB then procured a number of service providers to undertake investigations to research and obtain information, and assess demarcation requests. These are done strictly in line with legislated demarcation criteria.

We were one of the service providers selected to assist the MDB in this process.

As we travelled in some very rural areas, whilst we witnessed high levels of poverty and inequality, we were also struck by how much had been done in bringing basic infrastructure to communities that under apartheid had none. Water, electricity, early childhood (and other) schools are now found in places that never had such services.

During the course of the investigations it was apparent that some of the boundaries needed revision. In some cases, this was to ensure that a traditional area was not split by a municipal boundary, while in other cases it was to ensure that economically integrated communities were brought together under a single municipality; or for more functional reasons as laid down in legislation.

Once the investigations were completed the MDB assembles and considers all the information it has at its disposal, based on comments and investigation reports received, and decides whether or not to start pursuing a formal process for whether a boundary should be redetermined. If it decides to continue assessing the redetermination, this is known as a Section 26 process and formal requests are made for all interested and affected parties to comment on the proposed boundary changes. After considering the comments from members of the public the Board may decide to undertake site visits or hold public hearings to better understand the criteria as laid down in law.

During the third step of the process, the Board assesses the information received during the formal process and makes its determination (known as a Section 21 determination) on whether to change the municipal boundary, publish the determination and invite anyone aggrieved by such a determination to submit objections or to reject the proposed re-determination. Finally, , these decisions are published as a final decision of the Board.

In the current round of redeterminations, the MDB is about to complete the first step – publishing its decisions on which of these hundreds of possible municipal boundary redeterminations would need to be formally considered through a Section 26 process. The Board will then, for those it decides to conduct public hearing and formal investigations enter the process of further seeking requesting public comment on boundary changes from all interested parties.

While redemarcation may have a number of positive effects, it is important to note the problems that the MDB boundary redeterminations cannot solve. Demarcation cannot solve problems in governance, service delivery and financial administration. This is a key point as often commentators and stakeholders focus attention on these issues as if all governmental problems arise from demarcation. However:

• poor governance can only be solved through good political and administrative leadership,
• service delivery requires competent and ethical administrations, and
• financial management requires management which understand and sticks to the law, ensuring balanced and realistic budgets, transparent SCM processes and good consequent management.
  Overall, good and ethical local government leadership, competent administrations and adequate resources, amongst many other qualities, are what is needed to build effective, efficient, economic and equitable local government.

The issue of “community will”

In addition, South Africa’s demarcation criteria specifically excludes the issue of “community will” (such as whether or not a group of people want a boundary to be changed). This is because during apartheid boundaries were used to divide people along race and gender lines and the continued social, racial and other divisions found in South Africa cannot be used to justify creating boundaries which will further divide them.

However, under a developmental approach to government with all three spheres working cooperatively, boundary-making is about making sure municipal boundaries enhance functionality and build inclusivity. Ideally, and by way of example, our policing, health and education districts should align with municipal boundaries. Municipal boundaries should unite apartheid townships with economic hubs, and should mean that people live, work and shop within a single municipal area.

It is important, too, that this boundary making is not politicised as if it is being used to “win” elections. Given that our Constitution is founded on proportionality, changing boundaries for political purposes, better known as gerrymandering, has no real effect. This is because, at a municipal level, councils are composed of councillors elected proportionally, based on the votes gained by parties. If the parties in power do not deliver to their constituents, the democratic process of regular elections is there to allow voters to vote them out if they so wish.

In addition, the process of boundary-making must guard against cherry-picking – a process where communities or municipalities want to capture a “rates base” from another municipality into theirs, without considering properly the consequences. Such consequences include the potentially major disruption of services given that water treatment plants, for example, serve large areas and cannot easily have a portion divided out of their service area. Cherry-picking does also not take into account the significant needs for competent and professional staff to service such new areas.

There is no doubt that over the next few months as the MDB indicates which areas will have formal public meeting processes, many of these arguments will be advanced for or against such redeterminations. Importantly, though, all those involved in such processes should assist the MDB in making sure their submissions focus on the criteria which need to be evaluated by the MDB in arriving at any boundary redeterminations.

 

Audits Require Action from all of Society

Electoral Democracy, Proportionality and Building Coalitions

Statistics South Africa Census 2022

Complex Challenges in Housing the Inner City Poor and Vulnerable

Fixing Metropolitan Areas is a Non-Negotiable to make Growth Trajectory a Reality

Dr. Michael Sutcliffe and Ms. Sue Bannister, Directors: City Insight (Pty) Ltd

Presidential Speech

In his Opening of Parliament speech, President Ramaphosa argued strongly that as “an immediate priority, we will bring stability to governance in our metros and restore the delivery of services.”  He reflected on what needs to be done in eThekwini and then argued that “we will extend the same approach to other metropolitan cities that face serious challenges so that our cities can be engines of growth and dynamic centres of opportunity” and the intention is to “turn our country into a construction site.”

Fixing Metropolitan Areas, Urban areas – engines of growth

These are important and correct statements as throughout  the world the largest urban areas are the engines of growth.  In some countries, there is only one city that dominates, whilst in South Africa we have over 20 major and intermediate metropolitan areas.  Of course, the largest is the conurbation in Gauteng where it is often difficult to see where Johannesburg ends and Ekurhuleni or Tshwane begin.  And if these areas get sick, their provinces and the rest of the country suffer.

South African Urbanisation

South Africa is highly urbanised compared with most sub-Saharan African countries.  Today, for example, well over 80% of all of our people live on less than 2% of the land area.  But these high densities do not mean all South Africans experience urban life in the same way that say New Yorkers do.  The effects of colonialism and the apartheid state are still writ large in our cities with a highly fragmented and unequal urban system in terms of economic opportunities, social justice and environmental sustainability.

Forced removals, return migration and the fact that African South Africans were historically considered as transient workers in urban areas, has created a highly fragmented space economy between and within urban areas.  For example, a township worker may spend R100 a day on transport, with a commuting time of between two and three hours. After a day of work, they return home to a neighbourhood that is in many cases under-supplied with street lighting and without pavements, making their commute even more dangerous.  Most residents of former township areas still have lower access to health facilities, social services and other amenities compared to former white areas.

Fixing Metropolitan Areas: Category A municipalities

The Category A municipalities (often referred to as our metropolitan areas) are areas of major economic growth, hope and relative prosperity too.  The size of these areas can be seen in the following statistics: the eight category A metropolitan municipalities have grown from around 6.2 million households to almost eight million households between 2011 to 2022.  This means an additional 1.8 million households have all required formal services of water, sanitation, electricity, etc.  Importantly, in these eight areas, the number of informal households has declined from 11.2 million households to 8.5 million households, although these Category A areas still have some 60% of all informal households in South Africa.

Overall these eight metros are home to 45% of all households in our country.

Engines of Growth

There is no doubt they are major engines of growth, as reflected in statistics such as the Personal Income declared to SARS.  We find 18% of all personal income tax assessed by SARS is from Johannesburg, followed by Cape Town (13%), Tshwane (12%), Ekurhuleni (9%), eThekwini (8%), and the other three metros around 8%, which means almost 70% of all personal tax assessed is in these eight areas.

Racial and income segregation

However, it is in these same areas, though, that we find the greatest racial and income segregation, with increasingly gated enclaves of prosperity surrounded by high walls.  These contrast with informal settlements, mostly poorly managed and underserved with basic services where residents seek to survive as cheaply as possible

Fixing Metrpolitan Areas and Budgeted Spend

Expectedly, then, at a municipal level, these eight areas constitute a major part of the municipal budgets in South Africa. Total budgets of these eight areas constitute almost 60% of the total budgets of municipalities in South Africa, some R355 billion, compared with the remaining 249 municipalities sharing the remaining R261 billion.  The three Gauteng areas (JHB/TSH/EKU) are budgeted to spend a total of R183 billion this year, followed by Cape Town (R72 billion) and eThekwini (R60 billion).

Worryingly, though, Johannesburg, Tshwane and Ekurhuleni aim to spend only 7% of their budgets on capital works. Herein lies our challenge.  With the exception of Cape Town, the remaining seven Category A areas have had declining proportions of their budgets dedicated to capital expenditure and most have very poor levels of expenditure on repairs and maintenance.  They all have at least 1 financial trigger which by law requires some form of financial intervention.

Focus on infrastructure

There is no doubt that we must focus on infrastructure, but to do so we must improve competency levels at all three spheres of government, we must fill vacancies with appropriately qualified people, and we must cut out the corruption which is found in all spheres of government.  Other measures are also needed, including making land available, speeding up municipal processes, such as processing building plans and ensuring that there is no illegal interference in construction work.

We have a lot to be proud of in what we have done in the past 30 years, including our Free Basic Services and Human Settlements programmes which are often cited internationally as best practices.  But our challenges are not reducing, particularly with the climate variability we are now experiencing, where stronger winds and rains are no longer exceptional events but ones which we must actively plan for.  It is imperative our urban planning ensures that we do not locate poorer and more vulnerable people in areas that are vulnerable to flooding and other climate dangers.  We also have considerable work to do to ensure our emergency services are able to respond rapidly to emergencies and disasters in informal areas.  South African cities have, however, been very innovative in mitigating climate change by taking measures to reduce our greenhouse gas emissions. We have played key leadership roles in the many global climate change initiatives.

Most importantly is that our social, economic, spatial, financial and environmental challenges require of us a mindset that gets us all building our urban areas together.  In this regard, the continuing and residual effects of racism must be addressed.  In most of our municipalities the patterns of racial and income segregation have hardly changed after twenty years of democratic government.

We must develop new urban rules and regulations, with improved urban planning and design, but with the provision of developmental finance to ensure our plans get implemented. And of course, we must deal decisively with corruption, particularly those who abuse public office at the expense of delivery.

Audits Require Action from all of Society

Electoral Democracy, Proportionality and Building Coalitions

Navigating the Medium-Term Budget Policy

The Minister of Finance’s Medium-term Budget Policy Speech (MTBS) was delivered during a time of severe fiscal constraint. Despite some negative commentaries, there are in fact many positive initiatives. These range from short-term strategies to increase tax collections and reform the social wage system, to many initiatives focussing on immediate challenges, but which also have longer-term implications.

Budget Policy – Short-Term Strategies for Long-Term Gains

Addressing challenges such as logistics, infrastructure, crime, poverty, and inequality is crucial for extricating ourselves from the debt trap into which we have moved since 2008.
It’s essential that our strategies be rooted in empirical evidence and encompass an all-encompassing societal effort. Steering clear of overgeneralisations and supposed cure-alls, the focus should instead be directed towards precise actions within government spheres to instigate meaningful change.

A Closer Look at the Fiscal Outlook – Budget Policy

The MTBS has been extensively discussed, with many commentators weighing in on the fiscal consolidation and economic growth. However, it’s essential to delve into the specifics that impact people’s daily lives – like infrastructure and procurement policies.

Strengthening Municipal Finances

The National Treasury’s introduction of a municipal debt relief programme is a commendable move. Drawing from the success of such an initiative previously introduced in eThekwini, where consumer debts were progressively written off as long as they remained current on their accounts, this approach promises to instil a culture of payment compliance, essential for sustainable financial management.

Investing in Water and Sanitation

The Minister has rightly emphasised the importance of water and waste water systems, though mentioning other fundamental services like roads and public transport would have provided a more holistic view. Prioritising these sectors is about more than convenience; it’s about laying the groundwork for economically and socially robust human settlements and meeting environmental challenges head-on.

Reversing Troubling Trends

A comparison between the fiscal years 2012/13 and 2022/23 reveals concerning patterns in municipal budgeting and spending:
• Budgeting and Spending: There’s an alarming increase in unspent municipal budgets, from R35 billion to R71.4 billion, signalling poor budgeting and management.
• Operational vs Capital Expenditure: There’s a decline in the proportion of capital expenditure, dropping from 19% to 12%, indicating less infrastructure development.
• Maintenance Expenditure: The low and declining investment in repairs and maintenance is leading to increased losses and outages.

Solutions for Better Financial Management

Addressing these fiscal challenges requires a detailed analysis of each municipality. Solutions range from strengthening administrative leadership, enhancing consequence management, to providing support to reverse negative financial trends. Despite significant investment in financial management, the number of financially distressed municipalities is on the rise.

The Role of the Infrastructure Finance and Implementation Support Agency

The creation of an infrastructure finance and implementation support agency is a welcome recommendation. However, caution is necessary to ensure decisions are made based on evidence rather than a blanket belief in private sector efficiency. Our experience in eThekwini during the FIFA World Cup demonstrated that in-house engineering professionals can provide more cost-effective services compared to external consultants.

Overregulation and the Need for Streamlined Procurement

Overregulation hampers development, and hopefully the upcoming Procurement Bill will simplify processes while tackling the real issues in supply chain management. Based on our experience, transparency and an independent appeals process are essential to curtail corruption. A more transparent and responsive government structure, coupled with strict consequence management, can reshape public perception and mitigate protests.
In sum, the Medium-Term Budget Policy Speech provides a foundation upon which we can build a stronger, more resilient economy. The focus should remain on evidence-based, specific actions that address both immediate needs and long-term development goals.

 

Households and Living Conditions

• There are around 17.8 million households with an average size of 3.5 persons. However, there are notable provincial differences, such as Gauteng’s smaller average household size of 2.8 persons.
• Gender dynamics vary too, with KwaZulu-Natal reporting 53% of households headed by women, contrasted by 46% in Gauteng.

Service Delivery and Infrastructure

• Service delivery has improved remarkably across the board since 2011:
  • Access to piped water is now at 91.3%.
  • Flush toilets are available to 71% of households.
  • Electricity access has reached 94.7%.
  • The internet is accessible to 79% of households, a substantial increase from 35.2% in 2011.

Addressing Urbanisation and Service Disparities

South Africa’s urban landscape is highly differentiated, with the largest 20 municipalities now accounting for 53% of the population and 57% of the households. The census data reveal changes that are indicative of urban growth challenges but also show progress, such as the increase in formal housing and access to flush toilets across municipalities.

The Path Forward: Equitable Service Delivery and Infrastructure Investment

While the improvements in service delivery are praiseworthy, there is an urgent need to escalate infrastructure renewal and maintenance. Sustainable resource management and long-term planning are critical to meet the increasing demands for water and energy.

Call to Action for Municipalities and Government

• Municipal infrastructure spending on repairs and maintenance needs a substantial increase from the current 3% of PPE expenditure.
• Capital expenditure levels in municipalities are declining, a trend that requires immediate attention.
• Enhancing technical and professional competencies in all spheres of government is non-negotiable to combat the negative perception affecting government employment choices.

Looking Ahead with Optimism

As we envision the next census a decade from now, it is imperative that we collaborate to maintain the momentum of development. The information provided by Census 2022 is a powerful tool for measuring policy performance and guiding the equitable distribution of resources. It is upon us all to use this evidence to guide our country towards greater heights of service delivery and prosperity.

By leveraging the comprehensive data from Census 2022, we can not only celebrate our achievements but also critically address the challenges ahead, ensuring that South Africa’s growth is inclusive and sustainable for all its people.