Faculty of Commerce, Law and Management school of governance. Research report for the partial fulfillment of the masters of management in public policy degree
31 March 2016 / Fiscal decentralization is defined as the degree of autonomy and responsibility given to
subnational governments. Fiscal decentralization looks at the assignment of functions to
different levels of government and the appropriate fiscal instruments for carrying out these
functions. Fiscal decentralization implies a level of autonomy given to sub-national
governments. Through decentralized budgeting, local governments are tasked with the
responsibility of ensuring that service delivery to communities is effective and efficient.
Unfortunately the subnational spheres of government are more dependent on the national
allocations as a result of a more centralized revenue collection system. The national
budget is then shared vertically across the three spheres of government using the
equitable share formula. The Local Government Equitable Share (LGES) is mainly
allocated for the provision of basic services to local communities. The equitable share is
also complemented with various conditional grants aimed at the reduction of infrastructure
backlogs and other national priorities like water and electricity. However, the outcomes
have been uneven across municipalities with some seen as excellent and others as
dysfunctional.
The South African Twenty Year Review Report indicates that challenges with the quality
and functionality of municipal services in municipalities have led to backlogs and
unevenness in the quality of service delivery which has contributed to deep-seated
dissatisfaction in some communities, as evidenced by the steep rise in service delivery
protests. This is an indication of how municipalities are not able to match the revenue
they receive from the National Treasury and from collections made through rates and
taxes with the amount of services expected from them.
In a decentralized model of governance where national and provincial government are
able to assign and delegate their responsibilities to local government, funding must then
follow these functions. In doing do this will ensure that the responsibilities municipalities
are tasked with are backed up by the sufficient budgets and other necessary resources
from national or provincial governments. Unfortunately this is not the case in South Africa
as seen in the multiplicity of ‘unfunded and underfunded mandates.”
This clearly shows that the local government sphere has not been receiving sufficient
revenue from the Fiscus to deal with the growing demand for services propagated by
increased populations. This is a direct result of the failures of the fiscal framework that
governs the allocation of funds to local government resulting in the smaller and rural
municipalities being unable to deliver services to their communities.
The Local Government Equitable Share formula also does not ensure equity among the
citizens, hence most rural communities are still without basic services, including lack of
sanitation and refuse collection in all the villages of the country. Even if the LGES was
sufficient to ensure that basic services are catered for other functions of local government
would not be covered and therefore compromising the principle of horizontal equity
among the citizens of South Africa who are entitled to equal benefits, privileges and rights
within the boundaries of the republic. / MT 2018
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:wits/oai:wiredspace.wits.ac.za:10539/23758 |
| Date | January 2016 |
| Creators | April, Mvuyisi Sibongile Mkhululi |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis |
| Format | Online resource (xi, 83 leaves), application/pdf |
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