Local government needs a whole new business model – soon

Local government in South Africa needs heart. It needs ambition.

In many cases, it is characterised by unsatisfactory levels of service delivery, poor performance, outdated corporate governance prescripts, weakness at enhancing appropriate skills, and an inability to address the huge demands from societies for better and more efficient services.

According to the Department of Cooperative Governance and Traditional Affairs, a third of the country’s more than 250 municipalities are totally dysfunctional, a third are in serious trouble, and only one third are fully functional and delivering an acceptable level of service to their communities. This underscores the need for urgent strategic re-engineering.

It is vital that local government responds to President Ramaphosa’s State of the Nation Address in which he highlighted the need for job creation, local economic development and good governance while stressing the need to fight corruption and socio-economic decay. Local municipalities need to demonstrate that they are worthy of the trust people have placed in them.

The ability of local government to change the socio-economic landscape of South Africa is staggering. Enormous effort, together with considerable capital, is spent on local institutionalism in South Africa in an effort to affect social change, but the rate of return on these attempts is disproportionate. Local government has the largest market share in society but the smallest societal market capitalisation.

South Africa’s existing local government model cannot be repaired or panel-beaten any more. It has in many respects reached the end of its shelf life. It is overly bureaucratic and needs to become more innovative, idealistic and relevant to the realities of the day. It needs to regain credibility and achieve more intense socio-economic results.

Local government is the biggest business in towns and cities. It needs to resonate a likewise configuration. Job creation, for instance, is sandwiched in too many municipal organisational layers. Job creation needs to be isolated. Likewise, local economic development must become more catalytic. Value-chain processes need to become key processes.

The intrinsic value of local government must be exponentially deepened, and technocratic prowess pursued. Organisational redesign must become more stakeholder-satisfaction contextualised. Business intelligence must become common currency. Local government must be sensibly responsive, not robotic. The return on investment on the employee component must become more proportionate.

To restore trust in local institutionalism – to transform the way in which services are delivered – a multi-party or multi-disciplinary approach is required. This is the only way to mobilise the capacity needed to address the social, economic and organisational needs that exist if we are to progress on the development ladder and increase happiness.

There is a wealth of often-untapped assets within communities that could be utilised in the co-innovation, co-creation, and co-delivery of public services. Many of the problems experienced by local governments relate to insufficient administrative and managerial capacity – whether due to a lack of suitably qualified staff, specific technical skills or financial management expertise – or political interference in management decisions.

The gap created by poor service delivery opens the possibility for co-production initiatives to be considered. External expertise is needed in the effort to solve complex issues and generate various forms of capital – intellectual, human, financial, social and physical – for the benefit of society.

Although local government’s nemesis is generally regarded as service delivery, there is much more to consider. A more appropriate approach to innovation and industrial policy is needed, and should involve search, experimentation, monitoring, learning and adaptation, all of which need to occur in a context of openness to knowledge, trade, investment and competition.

Buried in the depths of local government there is definite nobility, a sublime soul that needs rediscovery and enactment.

But sadly, in many cases, local government has become an apparatus through which to obtain power, influence and destructive authority. This profound national asset that manages sizeable portions of our nation’s resources and potential, has become idle, pedestrian and padded. It has been eroded by paradoxical choices and strange coalitions of inadequate options to address the needs of local communities.

This has resulted in a credibility issue. The padded mechanisms of control and unnecessary duplication are unable to spark the anticipated results. Transition from a traditional, controlled, overly bureaucratic institution to a local-government entrepreneurial enterprise that hungers for a new clean and efficient meritocracy and technocracy is desperately needed.

Much of the criticism levied at local governments imputes human capital. This needs to change. Without human capital and its exploitation there will be no budget, institution, organisation, exploration and spiritual fraternity – no development. Human capital is the source of wealth creation and meaning in the world. It drives the economies of the world.

A local government should deepen, personalise and enrich the contact between a “lifeless cold machine” and the people it is involved with. It should humanise what has become a clinical bureaucratic operation and infuse this caged catalyst with a personality and emotional intelligence. It should be convinced of the many opportunities that are buried in the minds and idealism of its inventory. It should provide potential-unlocking opportunities and encourage the discovery of human capital formation that in turn leverages societal and political capital.

Local governments should be the trenches that provide shelter and survival, that symbolise restoration, and which instil fellow comradeship in life’s persisting battles. Our local governments can strive to become those trenches.

Local government will have to perform sooner, further, smoother, smarter and faster. It produces too little, too slow, and at too high a price. It has become lazy and conventional. Failure only happens with one’s consent. One doesn’t need to be big to win. Small organisations outsmart big rivals. To win or to lose is a choice.

* Johann Breed is founder and director of Beyond Local Government, and Dr Chris Jones is a theologian associated with Stellenbosch University.

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