The Realities of Free Basic Services and Indigency: Human Rights, Dignity and Financial Sutainability

South Africa has a complex intergovernmental system that comprises of nine provinces and 257 municipalities, with functions often shared concurrently and resources divided according to agreed fiscal principles and formulas. This situation means that the lines of accountability (responsibility being shared in many instances) is often blurred as one component is dependent on another.

While cooperative governance provides many strengths in a developing context, this is arguably its primary challenge. One of the challenges with the above system of accountability in a developing country context is around the ability and capacity of communities and civil society organisations to hold their local governments accountable. Amongst others, this is due to varying levels of education and access to information, as well as levels of understanding (or lack thereof) of the complex expenditure and financing mandates of national, provincial and local government.

While there is consensus that local government should play a developmental role, there has not been agreement on what exactly this means and how this role evolves and responds to different municipal service delivery contexts. Since the introduction of Free Basic Services (FBS) in 2000/01, the role of municipalities has understandably tended to focus on the extension of basic services to previously marginalised and under-served communities and the eradication of backlogs. Local government delivers key basic services such as water, electricity, sanitation and refuse removal. The 2011 Census (and subsequently the 2016 Community Survey) indicated that the number of households has increased considerably and that there are still significant backlogs across the country.

These developments put pressure on municipalities as demand for services increases. In 2016 municipalities identified 3.6 million indigent households as earning less than R3 500 per month. Of these 3.6 million households, only around 2 million were benefiting from indigent support for basic services.

This means that a high percentage (about 30%) of indigent households are not receiving access to free basic services (particularly water and sanitation), despite the constitutional and policy imperatives.

Exacerbating the challenge is the reality that more and more South Africans are increasingly unable to pay for municipal services and the vast majority of municipalities are unable to raise a substantial portion of ‘own revenue’, which is a key policy assumption in the national fiscal framework. A declining revenue base and increasing cost of services has put many municipalities in deep financial distress, meaning less resources to execute the developmental mandate and having to make painful choices between competing priorities, often at the expense of the poor.

This brief will review national policy and intent with regard to FBS, followed by how FBS are provided and budgeted for in three municipalities, in particular how it caters for those considered indigent. The three municipalities assessed are Lesedi Local Municipality (LM), uMshwathi LM in muMgungundlovu and Emalahleni LM.

The key questions are:

• Are the intended beneficiaries of this policy (i.e. the poor/poor households) in fact receiving the full benefit of the policy and enjoying the basic services intended to give meaning to their human rights, dignity and a decent standard of living?
• Are the municipalities in question using their equitable share allocations to ensure as wide a reach as possible of FBS for the poor and indigent, as indicated through the way their mpolicies are framed and applied and through their expenditure patterns?

The brief will highlight key challenges and gaps between the intended policies and how they are actually implemented, drawing on some lessons from these three examples (as limited as they are). Finally, some recommendations are put forward for consideration by policy makers and practitioners about how the gap between the intended policies and practice can be bridged in so far as ensuring that those who qualify do indeed have access to free basic services.