Speech notes: Draft resolution: Provincial government must undertake a thorough investigation into the outsourcing of services to the private sector

Issued by Bobby Stevenson, MPL
DA Leader in the Eastern Cape Provincial Legislature

The following speech was delivered by Bobby Stevenson, MPL in support of a motion tabled in the Eastern Cape Provincial Legislature, on 23 July 2020.

The global pandemic that we are currently undergoing has issued in a new approach to the delivery of services, not only in South Africa but also throughout the world.

It is no longer government as usual but rather the COVID-19 ushering in, what one would call “the whole of society approach”. It requires government, businesses, communities, and individuals to work hand in hand to ensure our society operates smoothly. This can be described as a multi-sectoral, or partnership, approach to government.

One of the most potent ways the government can amplify its impact is to leverage the involvement of the private sector in the delivery of services. Throughout the world, governments are looking for a new approach when it comes to the delivery of services, and this entails unleashing the entrepreneurial spirit of the private sector.

The relationship of the three spheres of government, specifically cooperative governance, has dramatically changed from what we would typically know it to be in South Africa. Cooperative governance has now taken on a new look and a new identity.

It has ushered in the modern era of partnership government. Government alone, as it is recognised, can no longer solely deliver services and needs a partnership approach to do so in a cost-effective manner.

The current developmental state model is collapsing all around us; one only has to look at how state-owned enterprises are faring such as SAA, Denel, Eskom and others. They are no longer financially viable propositions and are a massive drain on the fiscus.

To otherwise believe something different is to suffer what is called “institutional blindness”. What we are doing now is clearly not working, and it urgently needs to be changed.

Eskom has now entered into stage four blackouts which cost the economy an estimated R2 billion a day and has R480 billion debt. Our province should be leading the charge to end Eskom’s monopoly and allow the private sector to produce power on a large scale.

There are several lessons that we can learn from the pandemic, and we need to ensure that we take these lessons forward.

The future is focused on the whole society approach, which involves partnership government between the private sector, communities and NGOs.

In the Eastern Cape, COVID-19 has exposed an already broken state. The state cannot deal with the numerous issues that it has been charged with. Let us look, for example, at the health care system.

Why is it that the private sector can put up a field hospital in Nelson Mandela Bay within a few weeks, but the public sector hasn’t been able to do this within months?

Why is it that the MEC for Health recently said in a Microsoft Teams meeting that the cleaners at Livingstone Hospital need to be trained by an NGO to do their jobs?

Surely if management is unable to train and supervise people to clean a hospital, one should outsource that to a cleaning company with a contract with clear deliverables where you can hire and fire. In that way, you will manage to keep the hospital clean and maintain the necessary standards.

This benefits both patients and hospital staff.

Why can we not radically change how we run our hospitals; why can each hospital not be run as a business entity, where the management is outsourced with clear deliverables and the income derived from services in that hospital, stays in that hospital?

In some hospitals, there are empty wards, why can these wards not be rented out to the private sector and that income be used to uplift the hospital as a whole. There are many examples in the health sector, where partnerships could potentially be created with the private sector.

In the Western Cape, the provincial government has a partnership with Clicks, where patients who need their chronic medication can obtain it from one of their outlets during their standard operating hours. This partnership is beneficial when you cannot get to a public clinic during the week; you now have the option of collecting your chronic medication at the nearest Clicks. Obviously, there is not a Clicks in every time, but a similar arrangement could be entered into with other businesses.

Why can the Eastern Cape government not enter into similar partnerships? These sort of partnerships will surely make life much easier for those who are already struggling to juggle their daily lives, as well as having to wait in long queues.

Another area where we can improve the delivery of services is partnerships with private ambulance services. It is well-known that the provincial government does not have a sufficient ambulance fleet to serve the province effectively.

Why can this service, or elements thereof, be put up for private tenders to ensure that those who are in dire need of urgent services receive precisely that? We need to save lives, not an ideology.

Why have records within pubic hospitals not yet been digitalised? By making it compulsory for all documents to be digitalised, it would save the province many millions, especially with medico-lego expenses as most of the claims arise from records that are no longer available.

It is the job of government to manage the delivery of services, and not necessarily to deliver every service.

Similarly, the provincial government in the Western Cape has established what is called collaboration schools. These are schools where the private sector is involved in not only the management of the schools but they also assist with necessary resources.

A partnership is entered into that will assist in providing quality education in poor communities and also approve performance in underperforming schools.

At the community level, many initiatives are rising throughout the province where, noting the collapse of local government, residents are taking the delivery of services into their own hands.

There are many examples of where communities are involved in fixing roads, potholes, cutting the grass, picking up litter, painting lines, trimming trees, and painting buildings. This informal partnership approach of improving neighbourhoods can be called “my patch”, where people look after the patch in front of their homes and where applicable, their businesses.

This will start to evolve into formal partnerships as local government collapses even more.

Why is it that when it comes to road maintenance, one cannot enter into agreements with local communities where they take charge of their roads. This is particularly so when they can do it at a much cheaper price than the government. The roads maintenance backlog is estimated at over R120 billion.

It is perhaps in the area of safety and security that government can enter into one of the most productive partnerships to fight crime in this province, mainly through the use of technology where the government currently doesn’t have the skills or capital to utilise this equipment.

An example of this technology is a network of cameras throughout the province that are capacitated with license plate recognition, and time over distance as well. With this technology one would be able to trace stolen vehicles and apprehend criminals on the run. Similarly, the use of drone technology partnerships could be entered into to patrol certain areas.

Shot Spotter technology was also used in Helenvale in Nelson Mandela Bay to apprehend criminals.

What this technology does is triangulate within a few meters where a gunshot is fired within the community, and a patrol vehicle is then immediately dispatched to that area. To implement this technology again, a partnership with the private sector will have to be considered.

Why then has outsourcing of services become imperative for the government?

Simply put, we need to look for cheaper ways to carry out the functions of government. The current model, with a massive cost of COE is unsustainable.

Compensation of employees amounts to 65,7% of the entire provincial budget. The cost is very high, but the average citizen of the Eastern Cape bitterly complains about the standard of services, whether from provincial or local government.

Cash strapped municipalities are battling to pay their employees because the cost of COE is so high. The average wage in the public sector is 40% higher than in the private sector. A higher wage bill is going to eat up more and more resources that should be there for the delivery of services.

Tax revenues are shrinking along with our economy. The provincial economy is scheduled to shrink by 5,5% this year. The expanded rate of unemployment is now at 48,9%, and in the non-metro areas, it is now at 56,5%.

A partnership approach to governance could result in providing increased employment at a much lower cost than high paying public sector jobs. This is the hard choice that government is going to have to face, whether to look for a new way of delivering services or continue on the rocky road to ruin. This path is threatening the very legitimacy of government as an institution and will result in growing protests.

We are now moving towards e-governance where new skills are required to be able to deliver services with greater efficiency. This skills are lacking in government but are readily available in the private sector. 60% of the jobs that currently exist will be obsolete in 10 years’ time. For example, why is it that your vehicle license cannot be renewed online with the necessary safety protocols? In that way, the money would be paid directly into the provincial coffers.

We can no longer subscribe to the model of a developmental state. It is collapsing around us as we speak. The government needs to adopt a new fresh and innovative approach for people to live a life of value. That approach is called partnership governance.

The biggest obstacle to the success of this would be corruption. Corruption is occurring because of the breakdown of values in our society. Self-enrichment, greed and entitlement symbolise the moral breakdown that is occurring. The recent COVID-19 looting has shocked many South Africans as it steals resources that should be there for the benefit of all people.

Unless one deals decisively with corruption, it will create instability that can erupt into violent protests that can destroy the very foundation of our society. We need to halt the descent into the abyss of a corrupt criminal and incapable state. If we are to make any progress in the Eastern Cape with regard to partnership governance, we need to eradicate corruption.

A Democratic Alliance provincial government would implement the following measures:
Anyone found guilty of corruption should be sentenced to a minimum sentence of 15 years in prison.

We would also ensure that the payment of all public money is done in a transparent manner, by placing key information about tender processes online.

We would also require government departments to publish monthly financial reports dealing amongst other things with contracts being entered into, and tenders awarded.

We would also bring in direct elections for all political office holders so that South Africans can hold their President, Premiers, and Mayors directly to account.

We obviously also support bringing back a constituency system as well.

We would also implement lifestyle audits for all politicians and government officials above a certain pay level.

We would also ensure that officials found guilty of financial misconduct or mismanagement are placed on a register that disbars them working in procurement or supply chain management.

We would also protect and encourage whistleblowers to come forward.

Most importantly we would introduce a new tough anti-corruption unit to replace the Hawks that would have the requisites specialisation, training, independence and security of tenure. To tackle this scourge that is robbing the people of this province of hope and opportunity. Corruption is the thief of opportunity.

MPLs should not have to resort to laying criminal charges, asking the SIU to intervene and reporting matters to the Public Protector if this government was doing its job.

One cannot let old ideological constraints hold us back where the ideals of the National Democratic Revolution direct our regression as a province. The state should not control every aspect of society, the party should not control every aspect of the state, and a vanguard within the party should not control society.

These ideological constraints have led to state capture and corruption where the barriers between party and state have collapsed with many comrades thinking that it is their time to eat. The recent looting around COVID-19 highlights the structural problems of the method of government. We no longer have the resources to proceed as we have in the past, and we need a new approach. To believe otherwise is to suffer from institutional blindness.

In the early 2000’s I introduced the debate about learnerships in this house – where a stipend was paid for young people to gain work experience.I was howled by members of the house at the time and was accused of wanting to exploit people. Today it is the norm. To those unprogressive and reactionary forces who are wetting their lips to defend the status quo in this debate, I say remember that experience.

A partnership approach to governance will assist in turning the tide of poor service delivery in the Eastern Cape and ensure that we build a capable state.

Of course, it needs to be well managed with service level agreements in place and accountability built into the system.

There is an irreversible tide of history that is moving our province in this direction. You resist it at your peril.