We found that some provincial departments operate in silos away from municipalities to the extent that they cannot detect problems at an early stage. A classic example is the current intervention by the national Department of Co-operative Governance and Traditional Affairs in municipalities on matters that, in our view, could have been detected earlier by provincial departments if they were playing that role in terms of intergovernmental relations.
In most instances, integrated development plans, IDPs, in municipalities are not properly aligned with the provincial plans. One area of concern is the tendency that we have detected in municipalities of compromising service delivery by choosing to invest huge sums of money. For what purpose, we don't know. I hope that the Ministry for Co-operative Governance and Traditional affairs as well as the Ministry of Finance will have an interest in pursuing this matter further.
The NCOP is strategically placed to drive the process and encourage intergovernmental relations between the three spheres of government, particularly on matters aimed at fast-tracking service delivery. In simple terms, intergovernmental relations, in my understanding, means working together to do more, and that is the call the ruling party has made and it is a call that we should all respect.
Communication between spheres of government should be improved and properly co-ordinated at all stages - from planning to implementation. Whatever decision is taken in any of the forums created by the relevant Acts or interaction forums should also be communicated speedily to the recipients of such services. Perhaps this should be communicated at a faster speed than one would normally see used to report negative occurrences.
It is important to note that municipalities are assigned key service delivery functions such as housing, roads, provision of electricity, water and municipal infrastructure. They have significant autonomy to allocate resources to meet basic needs and respond to local priorities, while at the same time giving effect to nationally agreed upon priorities. For these reasons one wishes to commend the NCOP on adopting an approach of seeking to solve problems on the spot through the programme of "Taking Parliament to the People". This approach, if adopted by all communities during oversight visits, will yield much more fruit - as seen during the oversight visits in Limpopo, North West and the Eastern Cape.
The approach seems to be working wonders, given the reports we are receiving from all those visited so far. We are also beginning to see a lot of improvements in the spending of conditional grants, particularly those that are aimed at improving services at local municipalities.
Over and above that, the NCOP has the very important role of facilitating stakeholder engagement through its public hearings on the Financial and Fiscal Commission, FFC, recommendations for the division of revenue for the next financial year. The NCOP again, through its involvement within the Budget Council, as represented by the chairpersons of the Select Committees on Appropriations and Finance, has a role to ensure that inputs from stakeholders are seriously considered by the Budget Council. In terms of the Money Bills Amendment Procedures and Related Matters Act of 2009, it has a role to play by ensuring that, when considering the Budget, the issues that arise through the Intergovernmental Relations Framework Act structures and forums are taken into consideration.
We appreciate the fact that the government is accelerating its efforts to better assist municipalities to improve planning and financial capacity; to achieve greater efficiency in delivery and expand service access to households in predominantly rural and/or lower-capacity areas. In the context of these efforts, the equitable share, excluding the Regional Services Council, RSC, levy replacement and special support for councillor remuneration, has been growing and will still grow by an annual average of 12%.
We are, however, noting the challenges that remain key in the local equitable share of some of the municipalities. To state a few: the need for a differentiated approach for funding the different types of municipalities, whilst considering the unique expenditure needs, fiscal capacity and long-term planning and population dynamics; the broader objective of the local government fiscal framework, which is linking the local equitable share to conditional grants, especially infrastructure grants, so that any additional operating costs for municipalities are factored into the formula; increased operating costs associated with new social infrastructure funded by the municipal infrastructure grant, where there is no return on the infrastructure; the large maintenance backlogs and the continued difficulties in addressing these backlogs; sufficient flexibility to incorporate changes to current free basic services; cognisance of the other services that local government provides and the effect these expenditure items have on the respective budgets; and the cross-subsidisation ability of certain municipalities to provide services and account for fiscal capacity more accurately.
We appreciate the role that the Department of Co-operative Governance and Traditional Affairs is playing together with the Development Bank of Southern Africa as well as Treasury in assisting and ensuring co-operation between the provincial departments and local government. We are beginning to see, through such interventions, some progress in most parts of our country.
I wish to say, Deputy Chairperson, that it would be appreciated if Mr Johnson could provide the consistent presence of Salga in this House, so that they enrich our debates to assist in all the challenges cited at local government. I thank you. [Applause.]