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Policy Brief 7 - The Role of Targeted Intergovernmental Transfers in Urban Poverty Reduction

The In recent years recognition of cities as engines of economic growth, and their potential role in reducing poverty, inequality and unemployment, has generated a renewed focus on designing and implementing policy to overcome the constraints on maximising the potential of urban economies. In this regard, the Financial and Fiscal Commission carried out research to provide empirical evidence on how the
structure of economic activity (the location of industries and employment) affects the economic performance of South Africa’s urban municipalities, including the metropolitan areas and secondary cities which are touted as ‘engines of growth’. The research found that greater industrial diversity has a positive impact on growth in urban municipal per capita income. The study also found that municipalities with increased human capital, in the form of residents with certificates and graduate degrees, experience higher levels of growth in per capita income.

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Policy Brief 6 - Managing the Fiscal Implications of Learner Mobility through Better Planning and Budgeting

The urban development pattern in South Africa is changing from one characterised by the movement of only job-seeking adults to urban centres to one which involves the movement of school-going children across local boundaries to schools in different urban settings. Open school choice policies enable parents and learners to vote with their feet in search of better education. These movements affect the overall functioning of the schooling system from the perspective of planning and funding, for both the sending and receiving areas. Accordingly, this research evaluates the extent to which education fiscal transfers are affected by, or responsive to, the urban transformation process, and the efficacy of provincial planning processes in addressing education delivery challenges introduced by urbanisation. The findings suggest that in managing learner mobility provinces need not only focus on the budgetary implications, but also invest in long-term planning tools that account for spatial demographic shifts and development plans.
In particular, the study recommends a need for education infrastructure transfers, and their investment within provincial boundaries, to be sensitive to learner mobility patterns in terms of location and age structure.

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Policy Brief 5 - Aligning Urban Housing Supply and the Unhoused Urban Population

The populations of major cities are increasing at an alarming rate mainly as a result of urbanisation. This growth presents challenges to aspects of city management, including the additional housing required to accommodate the growing number of unhoused city dwellers. Human settlements is one of the sectors affected by urbanisation, as households that have moved to the cities have to be provided with adequate and decent housing. To understand the extent of unhoused households in South African metropolitan municipalities, the Financial and Fiscal Commission undertook research on the extent of the housing gap
by comparing urban housing supply with the unhoused urban population.
The research also reviewed challenges with respect to housing funding programmes, particularly the Finance Linked Individual Subsidy Programme (FLISP). The study revealed that while housing gaps exist across all household income groups, this is most pronounced for those households earning less than R9000 per month, while qualifying beneficiaries who are single and without dependents are excluded by FLISP.

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FFC Policy Brief Cover 4Policy Brief 4 - Public Transport and Mobility

Despite policy, the implementation and performance of the full set of transport functions by urban municipalities has been slow. Only four of the 13 cities that receive grants have an operational bus service
in parts of their cities. South African urban municipalities are experiencing a funding gap that limits their ability to implement integrated public transport networks (IPTNs), and to take on the full set of public transport functions. This is due to the significant capital requirements, and considerable operating shortfalls resulting from high costs and limited system revenues. The most promising potential sources of additional income to bridge this gap include the fuel levy, parking levies, parking tariffs and congestion charges. The Department of Transport should review the Public Transport Network Grant, investigate options to shift sources of funding towards retaining locally-earned fiscal revenue, and ring fence the local income sources for public transport use.

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FFC Policy Brief Cover 3Policy Brief 3 - Are City Policies and Regulations Responding to the Call For Compact Cities

Compact city policy has elicited debate among urban policy makers with some strongly advocating for it, while others cite its disadvantages. In 2011 a study by the Financial and Fiscal Commission found that as an urban form, a compact city is likely to have social, economic and environmental benefits. While some legislation and associated policies have, in theory, sought to address spatial inequalities in practice they have failed to do so. The highly fragmented urban form, the segregation of land uses and low density urban sprawl all add to the poor generic urban performance of South African cities. Further, these issues result in an inefficient transportation system, degraded natural and cultural environments, declining local economies and increasing poverty, inequality and unemployment among the poor.

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