A critical analysis of the implementation of policy mechanisms for cost recovery : a case study of the Msunduzi Municipality.

Abstract

Cost recovery has been widely documented as a means through which local municipalities can financially sustain service provision. In the South African context, the devolution of powers from the national government to local government transferred service delivery functions and financing of service provision to local municipalities. Policy analysts use implementation theory to understand the complexity of policy implementation. There are diverse models which policy implementation analysts use to analyse the implementation process but there is no consensus on an ideal model. This study attempts to analyse the implementation of cost recovery mechanisms at the Msunduzi Municipality. The study found that tailoring of cost recovery principles and other constitutional mandates (such as free basic services) is problematic for local municipalities. The study found that different contexts provide different outcomes of the policies implemented. For instance, the Provincial government intervention after a service delivery crisis of the Msunduzi municipality resulted into contrasting outcomes. Before the Provincial intervention, revenue collection was at 55% and increased to 80% after the intervention. The study also found that the capacity of the local municipality to implement cost recovery mechanisms has a great bearing on the outcome of the policy in question. The Provincial Intervention Team provided the necessary technical and human capacity to improve collection of consumer service debt. This is consistent with implementation theorists like Lipsky, Matland and Wiemer and Vining who argue that contextual factors may lead to divergence from initial intended goals and objectives of a policy or programme. The study also found that implementation of cost recovery is being hampered by non-payment of services charges by consumers, billing and collection problems and failure to comply with the Financial Management Act before the provincial intervention.