Financial and Fiscal Commission

1
FFC SUBMISSION AN ASSESSMENT OF DISASTER
MANAGEMENT FUNDING ________________________ PORTFO
LIO COMMITTEE ON LOCAL GOVERNMENT 13 August 2002
2
Background

• Formal request in October 2001 from Minister of
  Provincial Local Government
• Assessment includes funding implications for all
  three spheres of government
• FFC comments relevant for Bill and/or National
  Disaster Management Framework

3
Methodology

• Definition of disaster management in Bill is
  basis for different funding approaches
• Prevention / mitigation
• Emergency preparedness
• Emergency response
• Post-disaster recovery rehabilitation
• Data issues
• Data only required for emergency preparedness, as
  other categories are situation-specific
• Inadequate data, but not insurmountable

4
International trends

• Mitigation the key to effective emergency
  management
• Particularly relevant where there is weak
  infrastructure and inappropriate location of
  settlements
• National co-ordination

5
Current funding arrangements

• Emergency preparedness no funding mechanism (for
  local government)
• Prevention / mitigation no dedicated funding
  mechanism
• Emergency response provinces and munis can apply
  for assistance, but no guidelines
• Post-disaster recovery
• Provinces can apply for access to contingency
  reserve
• Relief funds (Department of Social Development)

6
The case for centralised funding

• Central funding mechanisms needed for
  prevention/mitigation, emergency response, and
  post-disaster recovery
• Subnational jurisdictions may not have the
  necessary resources
• Intergovernmental co-operation should be
  facilitated
• Ability to deliver basic services could be
  compromised
• Integrity of budget frameworks and
  performance-based budgeting would be undermined

7
Funding MechanismsEmergency Preparedness

• Provincial national government funded by
  equitable shares
• Local government
• Cost implications policy framework, DM Centre,
  DM Plan, Advisory Forum, units of volunteers
• Are responsibilities assigned in Bill new?
• If no, assumed to be covered by equitable share
• If yes, funding for
• Start-up costs (conditional grants to selected
  municipalities)
• On-going costs increase to equitable share

8
Funding MechanismsPrevention/Mitigation

• FFC Proposal
• National govt identifies priority projects
• Munis provinces apply for funding for priority
  projects
• For munis, funding provided on matching basis,
  with revenue-raising capacity taken into account
• Funding should be on MTEF budget of responsible
  national department

9
Funding MechanismsEmergency Response

• Very costly evacuation, shelter, food
• FFC proposal contingency reserve for emergency
  response once funds exhausted
• Provinces funding once financial threshold
  exceeded (up to 1 of budget)
• Munis funding once financial threshold exceeded
  (up to 1 of own revenue)
• Option of matching funding until final threshold
  is reached
• E.g. Matching funding up to .25, then fully
  funded

10
Funding MechanismsInfrastructure Rehabilitation

• Section 56 cost borne by organ of state
  responsible for infrastructure
• FFC proposal
• National departments, provinces, munis submit
  requests
• Verified, budget appropriation requested
• If funds can be spent during financial year,
  funded from contingency reserve
• Requests evaluated according to whether
  infrastructure is essential for basic service
  delivery and economic activity

11
Funding MechanismsRelief to Individuals

• Currently three funds, not efficiently operated
• FFC proposal
• Three relief funds combined and administered
  centrally
• Funds should be on budget
• If funds exhausted, access to contingency reserve

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Implications for the Disaster Management Bill 1

• District and local municipalities
• Review of Chapter 5 needed for appropriate
  division of responsibilities
• Local municipalities should primarily responsible
  for disaster response
• Where capacity lacking, districts responsible
  until capacity developed
• Clarity required where LM operates DM Centre,
  and/or takes responsibility for co-ordination,
  funding flows to LM

13
Implications for the Disaster Management Bill 2

• Funding in Bill or in Framework?
• Current funding provisions in Bill
• 7(2)(k) National DM Framework must include
  funding framework
• Prevention and post-disaster recovery included,
  but not emergency response
• 15(1)(e), 30(1)(e), 44(1)(e) National,
  provincial, municipal DM Centres must make
  recommendations on funding
• Overlap with 7(2)(k)?

14
Implications for the Disaster Management Bill 3

• Current funding provisions in Bill contd
• 56 Cost of public infrastructure borne by organ
  of state maintaining infrastructure
• 57 National assistance to provinces munis for
  post-disaster recovery rehabilitation
• Overlap with 7(2)(k)?
• Why assistance limited to post-disaster recovery?