LED AND STRATEGIC PLANNING IN SOUTH AFRICA

1. LED AND STRATEGIC PLANNING IN SOUTH AFRICA March 2011 CLGF Conference (Cardiff) SALGA Economic Development And Planning: MayurMaganlal

2. Contents • Introduction: Development of LED Strategies in SA • Strategic Planning in SA: • Integrated Development Planning • LED Planning • Importance of LED Planning • Challenges of LED Planning • Salga focus on promoting effective LED planning

3. Introduction: Development of LED Strategies in SA • A history of strong centralised planning and apartheid spatial development policies = little to no LED prior to the 1996 local government elections • Heralding in of a new local government structure (1996) – as an independent sphere of government in terms of the constitution • “Backlash” to apartheid planning has given strong impetus to local community-based planning (governance) • LED is now compulsory, through the Integrated Development Planning (IDP) process • Strong divergence between big urban (metro) and smaller urban/ rural Local Authorities, both with respect to the LED process, and actual LED results. • Also considerable questions around capacity to implement

4. Strategic Planning in SA: integrated development planning (iDP) • The IDP is an strategic development plan for a the 5 year Mayoral Term and is reviewed annually with budget cycle. (Municipal Systems Act, 32 of 2000) • Components of the IDP include: • Long term strategic plan (also intergovernmental alignment) • Stakeholder needs and political priorities (consultation) • Sector plans (environment, LED, transport, Water Services Development Plans) • Intergovernmental alignment, • Financial Plan (budget alignment and SDBIP) • Institutional plan (HRD and governance) • Performance indicators (basis of organisation and individual PMS) • Provincial government provides oversight and responsible for vertical and horizontal alignment • Regular reporting with budget and PMS (oversight by AG and annual report)

5. STABILISATION Dec 2000 – 2002 MUNICIPAL CONSOLIDATION Jan 2003 – Dec 2010 SUSTAINABILITY Dec 2010 - Beyond 1st Generation 2nd Generation 3rd Generation Strategic Planning in SA: Evolution of IDP’s • Aim: • Introduce IDP in mun areas • Inform equitable services in new municipal entities (backlogs) • Community participation methodology • GAP? • Budget format • Performance management systems • Sector planning link to IDP • Aim: • Clear geographic investment plan • IDP embedded in neighbourhoods • Shift: • IDP ownership by leadership • Spatial logic guides 5yr investmentper mun area by whole of govt • Ward-neighbourhood plan withclear service action (marginalised) • Harness resources of partners- business, civil society, labour • Prepare: • Good information per mun area • Execute participation method • Spatial planning logic • Ward/neighbourhood plan • Aim: • “Credible” IDPs across province • Shift: • IDP as ‘whole of govt plan’ • Stronger ‘long term strategy’ in IDP • Strengthen ward-level engagement • Sector Department engagement (incl. LGMTEC) • Improve IDP-Budget link • GAP? • Provincial investment plan • Weak local spatial plan • Citizens not well-connected to IDP(local responsibility and impact) 2009 - 11 2001 - 2005 2006 –2010 2011 - 2015

6. Strategic Planning in SA: LED Planning • Constitution gives local government the responsibility to promote social and economic development • The 2006 LED National Framework & associated toolkit, issued by dplg bridges many debates and provides clarification on roles & responsibilities • No clear indication of implementation of this National Framework • IDP’s and LED Plans have to be aligned to • National and Provincial Strategies (GDS, PGDS, NSDP and more recently the New Growth Path) • National, Provincial and Agency plans and policies and vice-versa

7. Importance of LED planning • Local economic development (LED) creates opportunities for local government, the private and not-for-profit sectors and local communities to work collectively in creating better conditions for competitiveness and inclusive, sustainable economic growth. • It is also seen as one of the most important ways of decreasing poverty and bringing together key municipal stakeholders to promote economic growth and development. • Strategic planning around LED focuses on key principles like: • Creating local partnerships • Using local resources • Adopting a flexible approach to respond to changing circumstances

8. Importance of LED planning • A credible LED Strategy should include the following: • Alignmentof critical pieces of strategies and policies - As outlined above and new growth path etc) • Consideration of spatial issues (alignment to SDF) • The empirical and statistical evidence to support development thrusts: socio – economic, census and other data (and means to unpack it) • Consideration for the financial implications • Must have evidence of stakeholder and community involvement • Objectives should be obtainable and measureable • Timeframe for critical milestones during implementation • Make considerations management arrangements and SMME support (establishment of agencies and entities)

9. Importance of LED planning • LED policies and plans will be council’s declaration of what they intend to do to support LED in respect of: • Procurement • Support and development of key business sectors and types • SMME support • Creation of a conducive LED climate • LED incentives • Focus on formal and informal sectors • Other key priority areas • Alignment of plans • The alignment of LED with IDP • The monitoring and appraisal of LED projects and programmes through the PMS • The importance of LED in the context of IGR (district, provincial and national) • The existence of LED strategies and related implementation plans

10. Challenges to led planning Planning and alignment: • Process for intergovernmental alignment of LED (strategy and programmes) happens mainly at legislation level: • Poor integration with national programmes such as EPWP, industrial incentives, tourisms, etc • Integration of municipal and Provincial plans • Need for a close relationships between established business and municipalities (increasing antagonism) • Very little reporting and M&E in place to provide any kind of feedback and support • Access to data for LED limited Content of plans • Missing LED success factors such as: • Market access strategies and demand versus supply side strategies • Integration into existing value chains versus new initiatives • An inability to correctly identify capacity constraints

11. Challenges to led planning Oversight and capacity • LED Leadership is often not being given the political weight and attention it deserves as one of the key priorities of local government • Big cities have dedicated Economic Development departments or Units, while most smaller LAs don’t even have a dedicated counselor • There are some Local Municipalities that have very limited capacity to develop effective LED strategies and implement them

12. Challenges to led planning Quality of plans • In poorer areas plans are still project-driven, have unrealistic targets, strong belief that having a plan = success and limited M&E in place to provide feedback • Question: support and building capacity vs rethink some areas of decentralisation • In urban municipalities need special attention and must be supported to understand their unique LED role in contributing to the national economy. • Specific interventions for urban centres will include: • Focusing on making urban land markets work for the poor; • Promoting more competitive city business environments and facilitating the movement of information, people and products within and between cities • Promoting appropriate economic integration zones • Market Access strategies and demand versus supply side strategies (planning unit issue?) • Integration into existing value chains versus new initiatives

13. Understanding roles and responsibilities

14. New Growth Path Drivers • SoNA: • R9 billion in the Jobs Fund over the next 3 years – public employment schemes plus subsidies to private employers • R10 bn from the IDC in next 5 years for job-creating projects • R20 billion in investment subsidies • Comprehensive support for SMEs • Address cost drivers and inflationary pressures across the economy • Active industrial policy based on increasing competitiveness and targeting sectors that can create employment directly and indirectly • Comprehensive rural development • Stronger competition policy • Stepping up education and skills development • Enterprise development • Reform of Broad-Based BEE • Reform labour policies to support productivity and improve protection for vulnerable workers • Technology policies geared to improving innovation in ways that support employment creation and small- and micro-enterprise • Developmental trade policies with a strong orientation to new growth centres • Investment to support African development 14

15. Salga Focus on Promoting better LED Planning • Encouraging a greater focus on LED (pro-growth strategies) as a separate priority within IDP • Working to establish better relationships with established business, and better integrate them into the planning process (business environment surveys, forums, etc) • Gathering and disseminating LED practices and experiences and developing sustainable knowledge platforms • Support and encourage better planning and alignment between District and Local Municipality strategies and across spheres

16. Salga Focus on Promoting better LED Planning • Increasing alignment of national government initiatives and the ability to access government funding by: • Municipalities increased participation in EPWP (promoting labour intensive job creation) • Municipal Tourism Development • Access to DTI Incentives and other areas of National Stimulus Package • Improving technical and analytical skills at a local level

17. Questions & Comments