Transcript 2007 BUDGET: FISCAL SPACE FOR MUNICIPAL ACTION
2007 BUDGET: FISCAL SPACE FOR MUNICIPAL ACTION
THE EFFECTIVE USE OF AVAILABLE MUNICIPAL RESOURCES By Liziwe Dyasi DBSA 23rd March 2007
OUTLINE
BACKGROUND TRENDS IN IGTS TRENDS IN TOTAL REVENUE FISCAL SPACE EFFECTIVE RESOURCE USE REASONS FOR INEFFECTIVE USE IMPLICATIONS OF OUTSOURCING CONCLUDING REMARKS
BACKGROUND
Constitutional Provisions Objectives of Local Government Powers and Functions of Local Government White Paper on Local Government Definition of “Developmental Local Government” Systems Act Mechanisms to achieve effective and efficient use of municipal resources Municipal Finance Management Act Efficient and Effective Use of Municipal Resources
TRENDS IN IGTS
05/06 06/07 07/08 08/09 09/10 LES 25,6% 87,3% 14,5% INFRASTR UCTURE 16,1% 15% 15% 23,8 % 54,4% 36,7% -6,6% CAPACITY GRANTS -14,9% 29,1% -11,3% -46,6% 0
TRENDS IN TOTAL REVENUE
LES 05/06 06/07 07/08 AVE 25,6% 87,3% 14,5% 13.66% INFRASTRUC TURE CAPACITY GRANTS OWN REVENUE 16,1% 15% -14,9% 29,1% 54,4% -11,3% 29.90% -2.68% 5.07% 28.50% 0.97% 2.72%
FISCAL SPACE
Budget Speech 2007: “Much of our economic and fiscal policies has (sic) been aimed at increasing fiscal space and reducing our vulnerability to financial instability” (Minister Trevor Manuel)
EFFECTIVE RESOURCE USE
“Public goals may be achieved through non-public means” (Bert Helmsing) Public delivery attributes: Decisions are through bureaucratic decision-making processes – accountability Chains of hierarchy are basis for implementation and delivery Decisions are enforced top-down Performance of public service depends on public management and capability of human resources Legislative and fiscal constraints – sometimes cause ineffectiveness and inefficiency
Reasons for Ineffective Use
Inadequate remuneration to attract and retain quality skills; Strigent labour relations; Frequent changes in goals of programmes Insufficient resources to meet goals Lack of incentives for effectiveness and efficiency Lack of M & E for effective programmes
Contracting Out of Public Services
Does it lead to effective use of resources?
Complicating factors to contracts: Limited Information; and Bounded rationality Shirking Level of monitoring
So what?
Need to curb leakage of targeted public resources Strengthen institutional capacity Strengthen incentives for effective and efficient use Strengthen citizen’s capacity to exercise control over effective use of resources