Municipal turnaround in Cape Town

Princeton University This analysis is based in part on research conducted by Michael Woldermariam and first published in July 2011 by Innovations for Successful Societies. The scoring assigned and the text below represents the Centre’s own work, however, and do not reflect the views of the case study authors, Innovations for Successful Societies, or Princeton University. Quotes included in the text come from interviews carried out in South Africa in July 2011.

Cape Town’s renaissance from 2007 onwards has taken it from being a run-down city with a crumbling infrastructure and severe levels of poverty, crime and unemployment to a well-run, solvent and stable municipality, with growing racial and gender equality. At the heart of this revival was its five-year development plan, a blueprint for socioeconomic reform, but executed in a gradual and pragmatic fashion.

The challenge

In 2006, Cape Town was plagued by poverty, unemployment, crime and ill-health, particularly HIV, while its infrastructure was in poor shape – inadequate public transport, a lack of good housing stock to provide homes for the soaring population, substandard utilities, and generally insanitary conditions. These problems had adversely affected public services for many years, and destroyed citizens’ trust in its local government.

It was high time to arrest Cape Town’s decline and bring out the true character of its social, environmental and architectural heritage. And among the many challenges was the task of hosting eight games in the 2010 World Cup, including a quarter-final and a semi-final.

The initiative

In March 2006, the Democratic Alliance (DA) won the municipal elections in Cape Town, taking control of the city administration, and Helen Zille became the new mayor. “Lacking the revenue and administrative capacity to address Cape Town’s infrastructure crisis, and facing a politically charged racial climate, Zille and her Democratic Alliance government initiated a package of innovative and far-reaching reforms.” [1]

In July 2007, the mayor issued Cape Town’s five-year Integrated Development Plan (IDP). As part of its long-term vision, it aimed to be:

  • “A prosperous City in which City Government creates an enabling environment for shared growth and economic development
  • A City known for its effective and equitable service delivery
  • A City that distinguishes itself as a well-governed and efficiently run administration.” [2]

In order to achieve this vision, it set itself some quantitative objectives:

  • An average GGP growth of 6% per annum to 2014.
  • A 50% reduction in unemployment and poverty.
  • Significant improvement in access to public transport, education, health and recreation facilities, etc.
  • Equally significant gains in integration, including black economic empowerment and gender equality, and in school, school and post-school learning.
  • To achieve this with no adverse effect on the environment.

The public impact

By March 2009, Cape Town had stabilised bureaucracy in the city, and increased the number of employers from 19,000 to 23,000. Data showed a steep increase in staff morale.

Financially the city was now spending 95% of its budget, which had increased to $3.8billion from $2.7billion. Specifically Cape Town increased annual spending on new capital infrastructure projects from US$161 million to US$806 million, doubled its annual expenditure on maintenance and repairs. Additionally the city’s budget was well monitored and managed and provided stability to the city’s strategic planning and operations. This new management meant that money could be invested in critical areas to help improve the quality of life of citizens.

All this resulted in Cape Town being rated as having the best government in South African rankings by 2010. Furthermore, in this year it successfully hosted the world cup, 100% of houses had access to basic sanitation and 92% had access to electricity. The city received a ‘Blue Drop’ award reflecting the water quality, they had initiated the Integrated Rapid Transport System. [3]

What did and didn't work

All cases in our Public Impact Observatory have been evaluated for performance against the elements of our Public Impact Fundamentals.

Legitimacy

Public Confidence Good

There was continued and increased support from the residents for the initiatives, and this was reflected in the victory of the DA in the municipal elections of 2011. The DA “won 51% of the vote, becoming the first party in Cape Town city history to win a clear majority”. [7]

Stakeholder Engagement Strong

The main stakeholder was the mayor and the city administration and the citizens of Cape Town. There were a number of other stakeholders whose engagement was encouraged by the mayor’s management team:

  • “The management team ... won the support of private investors, as indicated by its ability to float successful bond issues. [4]
  • “The DA forged an alliance with other opposition parties to gain a majority on the City Council.”
  • The team also established good relations with the city’s emergency and health services. “In its first 100 days, the DA allocated SAR56.8 million to fund critical posts in the city, particularly for nurses, fire-fighters and police services.” [5]

Political Commitment Strong

There was strong political intent to reform the city. The DA’s alliance with the opposition parties enabled it to implement reforms, and these plans were aligned with national and provincial initiatives.

Mayor Zille addressed the infrastructure crisis as a high priority. She “proposed a package of reforms designed to address the twin challenges of low revenue and weak capacity ... She appointed a city manager to run day-to-day operations and worked with an executive committee to develop policy proposals for consideration by a 210-member council.” [6]

Policy

Clear Objectives Strong

According to the report by the Cape Town's government, its overall vision was clearly stated, e.g., the city would be efficient and well-governed (see The initiative above). However, these vague assertions were supported by very specific objectives in such areas as infrastructure, the economy, racial and gender equality, education and the environment.

Evidence Good

The city’s approach to racial equality exemplifies its gradualist model, based on a careful evaluation of progress and adapting its model as the evidence grew more reliable. “Although merit remained the top criterion in hiring decisions, the DA established a policy of flagging the applications of promising black and coloured applicants who did not meet the requirements for a particular job opening but who could be placed in other positions that matched their skills. The goal was to take a long-term approach to promoting diversity, with the idea that these individuals would move up the ranks of the administration to become senior managers. The initiative was carefully evaluated by the city administration’s employment-equity director, Michael Siyolo. By 2011, 45% of the city’s senior managers were black or coloured.” [8] By these means, the city’s workforce became more diverse and more in tune with its citizens.

Feasibility Good

The gradualist approach that had worked well in achieving racial diversity was also applied to establishing the feasibility of the important job of property revaluation, which was the basing for the local property tax. “Completing the revaluation of all properties and adjusting rates was an arduous process. Ian Douglas Neilson, the Executive Deputy Mayor, decided to implement the actual revaluation of property and increase in rates incrementally, neighbourhood by neighbourhood, rather than waiting until all the numbers had been worked out for all properties in the city.” [9]

The approach to tax collection was to establish the principle first, in this case with larger firms, and then applying it throughout the city. “Collecting nearly US$645 million in unpaid taxes and service bills presented another set of challenges. Neilson recognized that collection required a practical approach that differentiated between debtors who could afford to pay and those who could not. In order to create momentum for the effort, he first targeted major corporations and the provincial government. If corporations failed to repay debts, Neilson cut their water and electricity.” [10]

Action

Management Strong

The city is governed by 210-member city council, administered through 23 sub-councils, and led by Mayor Zille. The administration worked to build the city’s income while, for example, the Bid Adjudication Tender Award Committee monitored the procurement and tendering process, which had been prone to corruption and, as a result, affected the city’s income. A reform team helped in streamlining the IT function.

Measurement Good

The overall objectives set out in the IDP were measurable and were carefully tied to formal indices: the Access Index, the Integration Index and the Skills Index. There were also metrics for individual projects. “In 2007, Zille’s team ... launched the Performance Management Dashboard as a way to track the progress and effectiveness of city projects. The system enabled the city to adhere to its plan and priorities by monitoring the activities of city departments. The dashboard was a software program designed to display the large amount of data generated by each city department. It could monitor project success rates and identify trends by department as well as the distribution of projects across the city. Zille noted that because the new system assembled important information automatically, it allowed the city’s decision makers to assess service delivery and take appropriate action quickly.” [11]

Alignment Strong

There was a gradual process of political integration, merging the 35 municipalities that made up the greater Cape Town area into seven local authorities, which became a single local authority with a population of almost 3.5 million residents in 2010. This meant that the different areas of the wider city cooperated more efficiently with each other.

There was a greater openness, and the participation of Cape Town citizens in municipal decision-making was welcomed. “Despite objections from committee members, [the deputy executive mayor] ordered the Bid Adjudication Tender Award Committee to open its deliberations to the public. Citizens were given access to the committee’s official reports, and any contract for city business had to be publicized on the city website where all competitors for a tender would register.” [12] There was also a more rapid and efficient response to complaints about city services.

Cape Town’s IDP was also carefully aligned with national and provincial initiatives such as the Accelerated and Shared Growth-South Africa, the National Strategy for Sustainable Development, the Provincial Growth and Development Strategy, and the Intergovernmental Development Agenda for Cape Town.