The growing role of democratically elected representatives in municipal administration has had a significant impact on the composition of councils and on the manner in which municipal functions are managed. For decades, municipalities have been run by civil servants keen to maintain the status quo. While this is often still the case, in many parts of the world democratically elected representatives are beginning to lead the transformation of municipal management, and there is an increasing recognition of the importance of training councillors to perform their role effectively. Strong leadership does not guarantee progress towards PPPs, but the political mandate does place the mayor in a stronger position to negotiate the various demands and come up with integrated solutions. This is often needed in contentious matters such as service delivery, planning, tariff-setting. It may not be appropriate for political leaders to assume actual management roles, but they do have an important oversight function to align municipal management to the council's political mandate and priorities.
However, the capacity of councillors to launch new approaches to service delivery or to oversee existing contracts varies significantly. Even where a clear policy framework exists, the success of policy relating to basic services lies in the implementation at local level, and this is very much determined by the human resource capacity of municipal decision- makers. The ideological bias of the council members, their level of education, their ability to conceive of a collaborative effort, and their understanding of their overall role as custodians of municipal finance, all contribute to their capacity to conceive of new arrangements and make these plans happen.2
Much depends upon the new leaders' perceptions of voter interests, and these perceptions are commonly framed as part of a short-term perspective that may not reflect the long-term advantages arising from partnerships. Some councillors see the role of the council as critical in promoting sectoral reform, cost recovery and partnership approaches, and they may play a vital role in disseminating an understanding of the scope and nature of private sector participation (PSP) and partnership approaches to service delivery. Indeed, as councillors are so often engaged in the private sector themselves they can be important advocates for promoting partnership, and may also be very skilled at working with stakeholders.
As most councils will have some form of committee system that will enhance councillor involvement in municipal management, it is likely that a number of councillors as well as the mayor and deputy mayor will be directly involved in the strategic and practical management of service delivery. The public health and engineering committee chairpersons will probably be responsible for waste and water respectively. Once again, the degree of influence they have over these committees will depend on a number of factors including municipal precedent, interest and skill. It is possible to see too that partnerships that appear to be failing often have lacked the direct contact (or understanding) of a councillor familiar with the nature, scope and problems of partnerships.
As councillors are usually elected for a relatively short period (three to five years), a primary issue for long-term partnership arrangements is the capacity and frequent turnover of municipal decision-makers.3 When newly elected councils are thrown into partnerships for basic service delivery, they must undergo a steep learning curve to come to terms with PPPs. Evidence suggests that there is little institutional learning, and the learning curve starts again after each election. This will vary as each council will have a different balance of business, social and political skills and interests. In South Africa, for instance, newly elected representatives have struggled with the concept of private sector participation in Stutterheim for years. While they were ideologically opposed to the partnership at the outset, as experience with municipal management increased they began to see the benefits of the partnership. Yet the real problem is that the former council which put the partnership in place was managed by businessmen, and the newly elected democratic council is more socially oriented. Its perceived lack of skill in negotiating change has fundamentally undermined the efficacy of the partnership (see Boxes 11.1 and 12.1).
Perhaps the primary constraints to the development of a partnership that effectively addresses the needs of the poorer groups in Stutterheim are unequivocal political support and management capacity for targeted partnerships. After the 1995 democratic elections, politicians in Stutterheim belonged to the school that ideologically opposed PSP in basic service delivery. More recently though, councillors have softened this stance as their understanding of governance and appreciation of finance constraints has developed, and as the national- and provincial-level political structures have formed agreements, the political wing has recognised the importance of tapping into external investment and management skills. It is therefore likely that, given the choice and with extensive public consultation, they would themselves enter into a partnership with the private sector in the future. Nevertheless, they are cautious and sceptical and have many grievances towards the arrangement they have inherited. Their understanding of and decision-making over issues concerning the role of the private sector is based on ambiguous messages, a weak contractual position, unclear financial information and an unequal playing field. As in many municipalities in South Africa, human resources in Stutterheim are characterised by an old-style administration working with newly elected, mostly African National Congress councillors. In general, the relationship between the two wings in Stutterheim is smooth. Unlike some neighbouring towns that replaced existing administrative staff, the Stutterheim council chose to keep the senior administrators in post before the local democratic election in 1995. Other posts, such as treasurer, have changed since that time. It is important to understand this split and to consider its implications for capacity. The councillors are politically agile but for historical reasons have not yet had significant exposure to management practices or governance. Since the election in 1995, council members have been trained and 'workshopped' in a wide range of skills necessary for them to perform their leadership and representative roles. The changing policy environment, the development of skills and understanding of governance has resulted in an acknowledgement that private sector resources are needed to meet reconstruction and development targets. The issue of administrative capacity, however, is somewhat contentious in Stutterheim. The administrators are able managers but there is no doubt that they would benefit from specific training in PPPs. Since this private sector approach to service delivery was introduced, no training has been undertaken by any official. Their lack of exposure to contract options has been limited, and attitudes have developed solely in relation to the one limited contract with which they are involved. Compared with other municipalities, administrative managers in Stutterheim lack the skill of recognising skills deficiencies. This has proven to be particularly problematic, as they are the main advisors to the council. Perhaps the primary areas in which the lack of skills has come to the fore are the financial side of water and sanitation delivery, and the understanding of partnership costs. The council has a mandate to provide services of the highest quality at the lowest cost. In Stutterheim it is currently assumed that the council can deliver the same standard of service at a lower cost, and as a result it has pursued a dual system of municipal and private sector delivery. It is not immediately clear what underlies this assumption: there is no evidence available to prove that this is the case. A number of councillors suggested that any private sector involvement implies a 'profit' element, and it is therefore necessarily more expensive than the cost of public sector operations. Unfortunately, this argument ignores the efficiencies and savings that can be made in the private sector. It is not supported by cost comparisons in the region or evidence from other parts of the world. There is also no doubt that management and leadership in Stutterheim would be improved by a cost-benefit analysis that itemises all the costs and benefits and enables a proper comparative assessment of alternative delivery approaches. Such a study would compare operator performance with international benchmarks. Accurate cost information will strengthen the municipal position whatever the findings. If private sector costs are indeed found to be high, the council will be in a strong position to negotiate. If they are found to be low, this knowledge will create a more receptive and conducive operating environment in which a more appropriate contract could be developed. At this stage, the reluctance of the administrative management to pursue such a comprehensive analysis is intriguing; councillors do not have the capacity or the time to prioritise it. A second common assumption in Stutterheim is that the water and sanitation contract with WSSA cannot be changed because the council cannot afford it. This assumption is based on the understanding that costs would be higher with additional private sector involvement, but revenue would remain the same. The council has not seriously examined the revenue benefits that the private operator could bring if an effective contract extension was negotiated, including customer management and payment awareness campaigns. Conversely, the private operator has not explored willingness to pay, nor has it effectively framed or communicated the opportunities for linking increased cost recovery, capacity building and community development with improved levels of service for the poorer communities.
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