PRESENTATION TO THE PORTFOLIO COMMITTEE ON ENERGY

1. PRESENTATION TO THE PORTFOLIO COMMITTEE ON ENERGY Program: Free Basic Services Presenter: Chris MALEHASE 10 SEPTEMBER 2013 Department of Cooperative Governance

2. CONTENTS OF PRESENTATION • Purpose of the Presentation • FBS Policy Overview • Indigent Subsidy (Equitable Share) • Achievements • National Status of Indigent Registers • Challenges • Solutions

3. PURPOSE OF THE PRESENTATION This presentation is designed to: Give a quick overview of the indigent policy framework and implementation guidelines. Challenges Solutions

4. FBS POLICY OVERVIEW • Government announced a statement of intent in respect of the provision of Free Basic Services (FBS) in 2000. • Section 152 of the Constitution of the Republic of SA, Act 108 of 1996, provides a legal basis for the provision of FBS. • Framework provides a foundation upon which municipalities can build their own indigent policies/ bylaws in order to meet their own responsibilities in respect of providing basic municipal services for the poor. These must align to the national guideline.

5. FBS POLICY OVERVIEW (cont…) • The Guidelines provide for the process to be employed when implementing FBS : • The criteria for the selection of indigents. • The registration processes that municipalities can employ • The screening of indigents • The necessary management system required – An indigent register • The implementation of Free Basic Services to indigents • Approval of applications • Monitoring of the provision of services and impact determination • Exit planning for indigents • Free Basic Services Program entails a basket of services that target the poor. These services apply to a specified capped services in water, sanitation, energy (Free Basic Energy & Free Basic Alternative Energy) and refuse removal that are provided at no cost to poor communities.

6. INDIGENT SUBSIDY - EQUITABLE SHARE Enable municipalities to provide basic services to poor households: • The basic services component funds (R277.78) the provision of free basic services for poor households • This component provides an allocation for every poor household in a municipality to cover the cost of providing a package of free basic water (R87.90), sanitation (R73.25), ENERGY (R56.24) and refuse removal (R60.39) • The same allocation per poor household is provided to all municipalities • Only poor households are included in the calculation of this component as non-poor consumers should be able to pay for their own basic services • Within the R277.78 basic services an amount of R27.78 per poor household per month is allocated for maintenance • The structure of the proposed LGES formula would make it possible to annually update the cost estimates for each of the basic services funded • The affordability threshold is R2300. 00 set at an amount that is equivalent to twice the monthly old-age grant.

7. ACHIEVEMENTS SINCE INCEPTION UNTIL 2009 Achievements: • Study to determine progress with and challenges faced by municipalities in the provision of free basic services & supporting those municipalities struggling with implementation. • National Policy Framework for municipal indigent policy. • Guidelines for implementation of municipal indigent policies. • Portal system launched at a national conference. • FBS monitoring and reporting system. • Framework for developing qualifying criteria for municipal indigent policies. • FBS integrated communication strategy. • Study to determine the cost of providing FBS. • Basic Services Publication

8. NATIONAL STATUS OF INDIGENT REGISTERS Annual Census Survey Ending June 2012: STATSSA

9. Difficulties encountered by municipalities: Implementation Difficulties encountered by municipalities: Definitions Targeting methods to be used Defining who is indigent Administering indigent registers Defining what is a household Monitoring delivery & impact Verification of beneficiary data Exit strategies are not clearly outlined Indigent Policy Implementations & Registers Impacts on the quality of life of beneficiaries Functional Indigent Policies Indigent Registers Cost limitations: Can only implement what can be afforded Annual Census Survey Ending June 2012: STATSSA CHALLENGES Non Functional / Without Indigent Policies 225

10. CHALLENGES (CONT…) • Poor FBS Coordination by National DCOG Resulting from Departmental Restructuring of COGTA in 2009 • Free Basic Services Program collapsed (Chief Directorate: headed by an Executive Manager supported by 3 Senior Managers including support staff below SMS). • Poor FBS Facilitation by Provinces • Dysfunctional or absence of FBS provincial forums in some provinces. • Poor FBS Facilitation by Municipalities • Absence of FBS coordination structures at municipal level:

11. SOLUTIONS AIMED AT ADDRESSING IMPLEMENTATION CHALLENGES Current Support: 2013/14 Financial Year As per the 2013/14 Annual Performance Plan: • Support is being provided to both provinces and municipalities through capacity building sessions to empower FBS managers and councillors responsible for the 4 services in municipalities to apply indigent implementation guidelines in order to develop own tailor-made credible indigent policies and registers. Progress to date: • North West: 15 municipalities supported • Northern Cape: 13 municipalities supported • Free State: 4 municipalities supported • Eastern Cape: 21 Municipalities supported • KwaZulu Natal: 7 municipalities supported • Limpopo, Western Cape, Mpumalanga and Gauteng: Similar working sessions are yet to be convened.

12. SOLUTIONS AIMED AT ADDRESSING IMPLEMENTATION CHALLENGES (CONT…) Draft Medium Term Strategic Framework Priority Activities (MTSF): 2014 - 2019 • To facilitate and support provinces to ensure that all municipalities have credible and functional indigent policies that will inform indigent registers. • Develop the national indigent register for municipalities to monitor and register access to FBS program. Building on top of the work done by the department with the prototype indigent register. • Develop national indigent exit strategy to assist municipalities graduate households whose conditions of leaving have improved. • Conduct implementation evaluations of the FBS program to make recommendations on innovative implementation modalities to accelerate access to FBS. • Further develop the indigent implementation guideline.

13. SOLUTIONS AIMED AT ADDRESSING IMPLEMENTATION CHALLENGES (CONT…) Draft 2014/15 Priority Activities • Further develop the Indigent Guidelines. • Develop the national indigent register for municipalities to monitor and register access to FBS programme. • Conduct implementation evaluation of the FBS programme. • Provide differentiated FBS support to municipalities as per the IDPs of municipalities.

14. SOLUTIONS TO REMEDY COORDINATION AND FACILITATION IMPLEMENTATION CHALLENGES (CONT…) • RESUSCITATION OF FBS PROGRAMME: • The decision was a strategic move by the Department to strengthen it’s Service Delivery Model to give effect to the National Development Plan and address some of the shortcomings of the 2009 departmental restructuring process. • The FBS is a primary programme without which the Department is incomplete to execute its mandate and realization of the vision towards maximization of effective service delivery. • The Current Service Delivery model in the department is informing the resuscitation of the FBS program to ensure alignment with the NDP and other relevant priorities to meet government’s expectations by servicing the poor. • The structure at sub-programme level is comprised of - at minimum 1 Executive Manager & 3 SMS in line with limited financial resources.

15. SOLUTIONS TO REMEDY COORDINATION AND FACILITATION IMPLEMENTATION CHALLENGES (CONT…) • STRATEGIC ROLE OF THE FBS PROGRAMME: • Coordinate the acceleration and successful implementation of the FBS programme • Monitor, report and evaluate on the provision of FBS implementation • Create the basis for effective pro- poor strategies to be effected. • Successful tracking of beneficiaries of the programme and creating linkages into other government interventions targeting poverty.

16. SOLUTIONS TO REMEDY COORDINATION AND FACILITATION IMPLEMENTATION CHALLENGES (CONT…) • Dysfunctional or absence of FBS provincial forums in some provinces: Solutions: Administrative: TORs have been developed to assist provinces to establish and convene quarterly FBS forums to ensure effective implementation. Discussions are being held with provinces that are struggling to ensure buy-in. Political: Minister will be requested through a submission to tackle the matter at MINMEC where implementable resolutions should be made to commit provinces to establish FBS forums that will convene quarterly meetings to provide strategic direction to municipalities in rolling out FBS. • Absence of FBS coordination structures at municipal level: Solution: Political: FBS program is both political and administrative program and, therefore requires political commitment by municipal councils. As such, Minister through MINMEC or other relevant platforms will be requested to address the issue of renewed commitment by municipal councils through budget and suitable capacity.

17. Thank You