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Sep 26, 2012

Partnerships key to local governments delivering on strategies

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PwC director Jan Gey van Pittius and Salga acting executive director for strategy, policy and research Seana Nkhahle discusses PwC's latest report that focuses on challenges facing local government. Camerawork: Nicholas Boyd; Editing: Darlene Creamer.
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If local governments in South Africa were to overcome challenges of strategy execution, they would have to partner with private, public and voluntary sector organisations, a report by auditing firm PricewaterhouseCoopers (PwC) has indicated.

Dubbed ‘Making it happen – A roadmap for South African municipalities to achieve desired outcomes’, the report was based on 36 surveys completed by six district councils, 23 local and seven metropolitan municipalities across all nine provinces.

The survey, which PwC undertook in partnership with the South African Local Government Association (Salga), started in 2010 and ended in 2011.

“The report is aimed at assisting with the way forward, to enhance local municipalities’ ability to execute their plans and strategies,” PwC local government specialist adviser Johan Leibbrandt said.

The report suggested that although leadership was critical if cities were to implement their strategies and deliver the desired outcomes, on its own it would not suffice.

“Partnerships are key for delivering the outcomes desired by local governments, from public–private partnerships, public–voluntary partnerships, to outsourcing and shared services,” PwC director Jan Gey van Pittius said at the launch of the report in Johannesburg on Wednesday.

However, the report put forward that with public, private and voluntary sector organisations collaborating to deliver public services, all stakeholders would need to be aligned to maximise the chances of success.

Currently, local governments in South Africa were failing to build the capabilities they required to overcome the challenge of execution in several key areas such as adequate financing, implementation planning, and comprehensive performance and risk management.

“South Africa is good at drafting strategies, but we are stuck at execution and detail management,” Gey van Pittius noted.

Of the municipalities that participated in the survey, 56% indicated that financing was the biggest barrier to implementing strategies, while only 31% of respondents reported having a strategic plan, underpinned by a financial plan with key risks properly assessed and mitigated.

Only one in three (30%) of municipalities had a comprehensive implementation plan, with accountabilities and responsibilities in place, together with frequent monitoring, updating and risk mitigation.

Outcome assessment and sourcing were cited as the biggest challenges to service delivery, while a mere one in five (19%) respondents had a comprehensive performance management framework in place that was aligned to the municipality’s strategic objectives and supported by transparent reporting of performance.

The study also revealed that almost two in six (42%) of municipalities reported that their organisations’ strategy was ‘completely integrated with the strategic vision’. For 39%, the level of integration was not complete.

“Municipal managers need a clear and deliverable strategy setting out the focus for the organisation…The ability to respond to a constantly changing environment through sensitivity to market forces and having visibility of the future impact; and a clear mandate for change that is driven through the organisation,” Gey van Pittius urged.

To understand the key challenges faced by local governments, PwC considered the service delivery cycle of municipalities.

According to 53% of respondents, the greatest challenges were posed by sourcing and outcome assessments.

The study further showed that most local governments reported the need to partner collaboratively with fellow city officials, followed by residents (44%) and to a lesser extent businesses (36%).

Local governments also expressed the need to partner with private (89%), public (86%) and voluntary (64%) sector providers to deliver their strategies effectively.

Only one in five (22%) of local governments strongly agree, and just over half agree (58%) that they have been successful in implementing their strategies.

“We believe that there is an urgent need for cities and local government organisations to prioritise their activities and develop a roadmap to ensure they have in place the internal capabilities and external relationships needed to deliver efficient and effective strategies,” Gey van Pittius said.

Salga acting executive director for strategy, policy and research Seana Nkhahle told Engineering News Online that the capacity within municipalities would have to be built in terms of systems, structures and processes to enable effective governance.

“We also then look at building the capacity of individuals within municipalities…to implement the decisions and policies that have been made,” he said.

Nkhahle indicated that legislation was adding to the challenges that were facing local government.

“We feel that in some instances local government is overregulated and in some instances it is underregulated.”

Nkhahle said this often resulted in municipalities spending an abundance of time managing regulatory and compliance matters, instead of governing and developing local communities.

The report finally suggested an ‘agenda for action’, which included municipalities’ investment in their financing capabilities, redesigning their organisations to enable more effective collaboration with primary stakeholders and assessing the impact of their size to find ways to standardise, simplify and streamline their operations.

Other propositions were the introduction of systems to measure outcomes and value for money, as well as the development of implementation plans with clear roles, responsibilities and timetables.

The report was launched on the same day as PwC’s international study of local government leaders around the world. Five municipalities, among others, the Ekurhuleni, Johannesburg and Nelson Mandela Bay metropolitan municipalities participated in the survey.
 

Edited by: Mariaan Webb
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