Summary Bulletin 1: DHS-LG Discussion List

15 September 2000

Issues that were debated over the past weeks were:

  1. Municipal Health Services
    • Definition of Municipal Health Services
    • Position of the District Hospital
    • Who will render the devolved health services?
    • What is the legal framework to devolve health services?
    • What have Provinces done so far?
    • What approach can be followed?
  2. Funding Local Government Health Services
    • Route of funding
    • The size of the funding
  3. Training of Municipal Health Councilors
  4. Reaching National Consensus


The Constitution assigns Municipal Health Services to Local Government as a Local Government matter. Municipalities have the executive authority and the right to administer these services. National and provincial legislation may also assign other matters to municipalities. Several questions arose:

1.1 How should we define Municipal Health Services?

It is at first important to realise that Health should define Municipal Health Services (MHS). Health includes the National Department of Health (NDoH) as the principal department, Provincial Departments of Health also having legislative powers to health, as well as Local Government (health) as they are the eventual service providers.

The functions and powers of different spheres of government related to health services would be outlined in the new National Health Act. The prevailing Health Act (Act 63 of 1977) does not assist in clarifying the issue, nor does the White Paper on the Transformation of Health Services or the White Paper of Local Government. There are different approaches to defining Municipal Health Services:

  1. The NDoH has adopted the position that all primary health care services should be delivered by local government.
    There are different approaches in defining this basket of services:
    1. Minimalistic (Environmental Health Services and preventive personal health services)
    2. Flexible (Individually negotiated)
    3. PHC Package (According to National PHC package definition)
    4. DHS Package (Comprehensive PHC plus district hospital)
  2. The Local Government Portfolio Committee considered MHS only as environmental health services, a position objected to by the health fraternity.

1.2 What is the position of the District Hospital?

The position of the district hospital depends on the definition of MHS. It forms an integral part of MHS according to a national document tabled at the National District Health Systems Committee in March 2000. The period over which hospitals would be devolved is flexible and in some places may take many years.

1.3 Who will render the devolved health services?

  • Local Government will be the provider of Municipal Health Services.
  • The NDoH has taken a decision to align its health boundaries with the new municipality boundaries. Each of the 6 metros will thus become a health district as will each of the 47 district municipalities. There is a view that the larger local municipalities like East London, Bloemfontein and Pietermaritzburg should be considered health districts. In addition to health districts some provinces have demarcated sub-districts. The exact nature of sub-districts is still to be clarified. If these are local municipalities, the roles and relationships between the various local government providers in an area need clarification.
  • Another important aspect is that local government is entering its final stage of transformation with many municipalities collapsing into single structures. The Municipal Structures Act, 1998 (Act 117 of 1998), provides for such structural transformation processes within local government. Sections 84 and 85 of the MSA assign Municipal Health Services to Local Government.
  • An important principle is that structure follows function. If function is not clearly defined then it is possible that the establishment of a structure could be inappropriate.

1.4 What is the legal framework to devolve health services?

The Constitution provides a legal framework for devolution of services to municipalities according to two approaches:

  1. Assignment (Sections 99, 104, 129, 139, 151,156)
  2. Delegation and agency-based services (Section 238)

1.5 What have Provinces done so far?

  • KwaZulu Natal defined municipal health services as those determined in national legislation. It also provides for performance agreements between the MEC and District Health Authorities. Financing is not clearly described.
  • The Free State Provincial Health Act, No 8 of 1999, provides inter alia for the establishment of District Health Authorities. The range of services to be provided is clearly defined in a schedule. It includes personal and non-personal primary health care services, accident and emergency services, medico-legal services and the community hospital. Funding (essential resources) would come from the province as well as the local district.
  • The NorthWest Province plans to de-link, as an initial effort, district hospitals from the envisaged devolution to Local Government.

1.6 What approach can be followed?

  1. A National Framework

    A National Framework will provide for a structured and uniform approach across the country.

    What is required is some long-term vision. The decision about assignment and delegation or agency services is then guided by this long-term vision.

    From the debates the long-term vision appears to confirm the 1995 policy of having the complete range of district health services part of local government powers and functions and thus equates the definition of MHS.

    If MHS = DHS, then all the services are assigned. The implementation process may span a few years, but then at least the responsibility is at the right place.

    If another definition of MHS is accepted as the vision for MHS, then some services are assigned, some delegated, even further complicating the funding, the management of resources and the monitoring thereof. Relationships will become very complicated.

    If a narrow definition for MHS is accepted as a point of departure , the Constitution makes provision that other services could be assigned later. The implication on funding, however, could be negative.

    The crux of the matter is to get national consensus on the vision and the definition.

  2. Implementation

A phased approach is required in almost all districts. The devolvement process requires an envelope of support and supervision from the provincial and national offices.

Decisions about rationing, priority setting, purchasing etc could be based on co-operative government principles amongst province and local government.

About District Hospitals: In many parts of the country the district hospital forms the backbone of district health system capacity. If District Hospitals become detached from the system, it could be extremely detrimental to the quality and continuity of services.

The implementation process should ensure:

  • Minimal interruption of services
  • Effective communication to staff
  • Thorough planning and a structured approach.
  • These should be guided through a strategic framework with both a service plan and a human resource plan.


2.1 Route of funding

The funding of local government health services could be from 3 sources:

  • National Fiscus: This will form part of block grants. Whether health can or should be ring-fenced is open to debate. It is not clear whether a contractual relationship, apart from statutory provisions such as the Public Finance Management Act, would prevail.
  • Provincial transfers: The size of this funding and the range of services will impact on the contractual relationship between these two spheres.
  • Local revenue: Only the district hospitals have the potential to generate some revenue. Local tax revenue would continue to be added in the rendering of health services.

2.2 The size of the funding

The range of services, the source of funding and the basis for determining the amount still needs to be clarified. Even the affordability of the Primary Health Care package is still under debate. Sections 227 (1) and 214 (2) of the Constitution provide principles when the amounts of funding are considered.

The fact that the Dept of Finance has tentatively defined MHS as environmental health services only, complicates the approach that is now required. Provinces will thus have to fund all personal health services. This funding will then be on the basis of an agency service, implying that the agent (viz. Local government) determines the budget, with no legal requirement to contribute financially. A contract is then required between the principal and the agent rendering a defined standard of service against a defined level of payment. Decentralising the service while seeking other ways to control performance and standards seem inappropriate. The funding responsibility needs to be located, and this is dictated by the definition of MHS.

About Equity:
Although transferring funds directly from the national sphere is the most secure route to attain equity, current emphasis is placed on re-allocating local tax revenues.

District Council levies will increasingly play a key role in achieving equity and ensuring sustainability at the local level. The Western Cape considers a resource sharing agreement between district and local municipalities by freeing some RSC levy funds.

About dedicated funds for Health Services:

The question is to what degree the funding for health services should be dedicated.

The Western Cape approaches this by means of annual transfers within a medium term strategy towards local municipalities. It includes committed grants earmarked to achieve specific policy objectives or priority services.

They furthermore plan to establish a mechanism for the transfer of discretionary funds to allow for some flexibility. Efficiencies will be rewarded and alternative revenue streams are investigated.


The Free State developed a framework for the training of District Health Councilors. The further enhancement of health governance skills of councilors requires urgent attention.


Mr. Ray Mabope is planning a National Summit to obtain national consensus on some of the issues mentioned during the debates.

It would address two things:

  1. The statutory definition of MHS
  2. The process of implementing the definition.