President Cyril Ramaphosa’s Coordinating Council (PCC) has endorsed a new district-based model for development.<\/p>\n
The model – which will first be piloted in the OR Tambo District Municipality in the Eastern Cape – will allow for more specific service delivery and budget considerations ‘at a district-level’.<\/p>\n
“Across the 44 districts and eight metros in the country, all developmental initiatives will be viewed through a district-level lens,” the presidency said in a statement.<\/p>\n
“Development will be pursued through single, integrated plans per district \u2013 one district, one plan – that will outline the role of each sphere of government as well as the role of communities and civil society sectors in each district.”<\/p>\n
The PCC said that the new model will require that national budgets and programmes are spatially referenced across the 44 districts and eight metros from the 2020\/21 Budget cycle.<\/p>\n
A similar realignment of provincial government budgets and programmes will take place.<\/p>\n
“This shift in planning is expected to narrow the distance between citizens and engender active participation by citizens in development, and enable long-term planning as well as responses to immediate ‘burning’ issues,” the PCC said.<\/p>\n
Municipalities in trouble<\/strong><\/p>\n The announcement follows a recent National Treasury report on the state of local government finances, which provides an overview of the financial position of all 257 of the country\u2019s municipalities.<\/p>\n The report found that while most municipalities are in reasonably good shape about 125 municipalities are in varying degrees of financial distress, and remain a cause for concern.<\/p>\n Some of the main areas of concern include:<\/p>\n Municipalities continue to have insufficient cash coverage to fund their operations<\/strong><\/p>\n A total of 121 non-metropolitan municipalities and three metropolitan municipalities reported cash coverage data, which failed to meet prudent standards in 2017\/18.<\/p>\n Only 55 local municipalities and 15 district municipalities had cash coverage of more than three months of operational expenditure.<\/p>\n This indicates that municipalities continue to struggle to understand and action the critical concept that budgeting for surpluses is necessary to avoid cash and liquidity problems.<\/p>\n Overspending of operating budgets has decreased<\/strong><\/p>\n The total number of municipalities that overspent their adjusted operational budgets decreased from 155 in 2016\/17 to 131 in 2017\/18.<\/p>\n In total 25 municipalities overspent their operational budgets by more than 25%.<\/p>\n These municipalities include two secondary cities, 21 local municipalities and two district municipalities.<\/p>\n Underspending of capital budgets continues to be a challenge<\/strong><\/p>\n Municipalities underspent their capital budgets by R16.3 billion (or 22.9% of R71.1 billion adjustment budget).<\/p>\n Metropolitan municipalities accounted for 13.2%of all capital budget underspending followed by local municipalities at 8.1%, and on average metros failed to spend 20.6% of their capital budgets.<\/p>\n The total number of municipalities that have underspent on their capital budget by more than 30% have increased from 67 in 2016\/17 to 92 in 2017\/18.<\/p>\n
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