Break the cycle of SA municipal decay by addressing ballooning employee costs, incompetence

Municipalities are grappling with a growing dilemma of ballooning costs associated with their employees and other service providers. This trend, evident over the past 15 years in South Africa, paints a concerning picture. 

On average, local government employee costs have surged by more than 10%, far outpacing inflation. These rising expenses, alongside unchecked increases to suppliers and consultants, are indiscriminately pushed on to residents. 

It’s a cycle that needs breaking.

Unlike the competitive landscape of the private sector, municipalities operate without direct competition. This reality creates a blind spot for municipal management, who often overlook stringent cost controls and the need for employee productivity improvement. 

This situation has culminated from years of inadequate financial management, resulting in public sector salary scales that exceed those in the private sector.

Compounding the problem is the absence of accountability for lacklustre output and insufficient productivity enhancements in local government. 

The outcome is an annual surge in operational costs, prompting municipalities to turn to residents for more revenue while offering less in return.

This precarious scenario has now reached a critical juncture. 

Citizens, fed up with escalating costs and diminishing services, are resisting payment and seeking alternative solutions to their supply of water, electricity and other essential services normally provided by municipalities. 

The more municipalities thrust irrational and excessive increases onto their customers, the stronger the backlash – a growing sentiment that is manifesting in towns and cities across the nation.

The different approaches to addressing these problems and the respective fallout that takes place are playing out in the metros of Tshwane and eThekwini, where clashes have erupted between officials, administrators and residents, borne out of previous unprofessional and mediocre municipal leadership, which has given rise to prolonged hikes in salaries and other excessive expenses.

Tshwane’s Mayor Cilliers Brink faces severe cashflow strain that stems somewhat from past unsustainable salary and service provider increases. His leadership is finally addressing the issue by curtailing salary hikes to levels below inflation, despite anticipated union unhappiness.

In eThekwini, on the other hand, prior mismanagement has also led to escalating salaries and costs, leaving the city financially depleted and its productivity and service delivery plummeting. 

However, mayor Mxolisi Kaunda’s resistance to acknowledging and dealing with the problems within the city’s administration has exacerbated citizen unrest, leading to a tax revolt by some resident associations.

Unless checked, Kaunda’s unsustainable stance will spell economic disaster for eThekwini over time. 

Unlike the private sector, where customer-centricity is a hallmark of success, municipalities often disregard this principle due to the absence of the ability for quick switches to alternative service providers, when it comes to residents and businesses within the boundaries of poor-performing municipalities. 

Over time, citizens either relocate to areas with better offerings or implement solutions themselves, but in the short term this is not so easy and they adopt a position of resistance and pushback.

For municipalities like eThekwini, provincial and national intervention is needed to prevent further damage to the economy and investor confidence. 

At the heart of the municipal decay lies a plethora of incompetence, and unprofessional foresight and conduct. Increasing the workforce and a greater reliance on consultants won’t solve this problem; it merely compounds the financial strain and infrastructure deterioration.

Excessive valuations and tariff hikes are pushing residents to their limits. 

Municipal charges, now a significant portion of household budgets, compete with essential expenses. This trend discourages property ownership and middle-class growth, which adds to the economic crisis facing towns, cities and the nation.

Unless there’s a fundamental shift in local government leadership’s approach, the situation will spiral out of control and municipal tax revolts will become a widescale nationwide reality. 

It’s time for meaningful action, not just rhetoric and discussions.

In sum, municipalities must recognise their responsibility to citizens, rein in expenses, reduce their bloated employee costs and prioritise efficient service delivery. 

Only through genuine change can we avert an impending catastrophe. DM