Dignity in Debt: How Local Government can Gain the Trust of Citizens and Foster Responsible Citizenship

This example of “what works” showcases a debt relief project that is more than just a game of numbers; it is about ensuring dignity for the poor. Here, the delivery of basic services is enhanced as a South African municipality connects with a community in a personalised and supportive way. 

This is the first in a five-part series on the environmental innovation of the Impumelelo multiple award-winning e’Thekwini Municipality in South Africa. Read more about the creative ways South Africans solve public problems every week from the Impumelelo Social Innovations Centre, the country’s repository for solutions that improve quality of life for the poor.

© e’Thekwini Municipality

Last year, South African Minister of Water and Environmental Affairs, Edna Molewa urged municipalities to address rising municipal debt around the country. In 2009, municipalities owed R1.2 billion to South Africa’s water boards and this figure rose to R1.4 billion in 2010. Water boards are parastatal agencies which sell bulk water supply to municipalities. In 2011, municipalities owed water boards a combined R1.7 billion.

The chronic indebtedness of South African municipalities, the ongoing public service protests and the municipal mismanagement widely-reported on make for a toxic mix which underlies the lack of citizen trust in local authorities. How can municipalities gain the trust of citizens and foster responsible citizenship? This dilemma lies at the heart of providing pro-poor debt relief to citizens in South Africa.

The e’Thekwini Municipality based in Durban, the capital city of the KwaZulu-Natal province, tackled this problem in 2004. Its Water and Sanitation Department targeted 25 000 of the most severely indebted customers in 20 municipal wards with a combined debt of R20 million, or R800 per household on average.

e’Thekwini instituted an integrated technical and social approach to recouping this outstanding debt. The social dimension relied on consistent community participation to help households along this payment process. Residents participated in open forums where their concerns were used to design the project initially. The department spent a full year conceptualising, calculating costs, and conducting community workshops with ward councillors, households, and civil society organisations.

© e’Thekwini Municipality

Then e’Thekwini created employment for twenty local residents as Customer Service Advisors (CSAs) who acted as the eyes and ears of the municipality. CSAs regularly visited homes to inspect the property for leaks and educated families about reducing water consumption, how water tariffs work and the common causes of high water bills. CSAs generate colour-coded reports on each household which notes various issues detected during their visits such as incorrect names on bills, leaks and meter malfunctions. CSAs encouraged citizens to visit the e’Thekwini Customer Office where these matters are resolved.

The progress of CSAs is monitored weekly and the department scrutinises their reports and checks the faults reported on. This feedback loop triggers a return CSA-visit to check that faults are dealt with timeously. Customers that do not deal with their arrears, receive personally delivered final warning letters. A social worker, appointed by the department, is also available to counsel families where necessary.

The municipality installed a flow limiter device in any household unable to settle their debt. Flow limiters help households keep within their free water allowance which the municipality increased from 200 litres to 300 litres. These devices then regulate the water supply for each household to 200 litres in the morning and a further 100 litres later in the day, preventing households from incurring additional and unmanageable debt. Once their account is settled, households can have their flow limiters removed.

© e’Thekwini Municipality

If households cannot pay, water supply is moderated to a trickle until a payment timetable is arranged. e’Thekwini worked closely with households to help them address their debt in a variety of ways. One option included paying it off in one go. If households could not manage this, e’Thekwini agreed to reduce their debt incrementally in addition to arranging for the installation of a flow limiter. The department froze the outstanding debt which could be paid off interest-free over a set period.

Flow limiters, individualised payment plans and CSA support helped e’Thekwini recover approximately R98 million from the 45 000 households on debt relief. The colour-coded reports also helped the department calculate the cost-benefit of CSA visits in relation to the amount of paid arrears and reported leaks. The water loss through leaks declined from 42% to 32%. No mean feat given the size of the population and area covered.

e’Thekwini’s debt relief project is not just a game of numbers. It is about ensuring dignity for the poor. This example of “what works” proved the willingness of under-resourced households to pay for basic services when municipalities can connect with communities in a personalised and supportive way.

Read about the creative ways South Africans solve public problems every week from the Impumelelo Social Innovations Centre, the country’s repository for solutions that improve quality of life for the poor. This is the first in a five-part series on the environmental innovation of the Impumelelo multiple award-winning e’Thekwini Municipality.

Visit www.impumelelo.org.za    

One Trackback

  1. By Link Loving 01.03.12 « Casper ter Kuile on March 1, 2012 at 7:53 pm

    [...] How to achieve dignity in debt. What Works. [...]

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