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THE deal now offered by most councils to commercial, industrial and institutional ratepayers, that they pay around 50 percent of their debts within the next month and be forgiven the rest of their debt, raises a number of questions. The most obvious, especially when these deals are coupled with last year’s cancellation of debts owed by householders, is whether councils were not overcharging in the first place. Councils are managing on far less revenue than they were budgeting for and are more concerned over cash flows than figures on an income statement.

It is clear that councils are able to provide the admittedly truncated services they now offer at a significantly lower price than they were charging, so long as they are paid promptly the cash they need to continue offering those services.

This opens up the opportunity for a debate on what services residents and businesses require and how much are they willing to pay for each service. Far more accurate information now needs to be given to residents on the cost of each service so that the debate is built on facts, rather than emotions. Certain services — health, water, sewage and roads — are required by all. But other services may be seen by some as luxuries, or at least as not worth the cost to each resident, and here more imaginative funding through user fees might be more appropriate; those who want them pay for them.

We also need to factor in the requirement for replacing a lot of infrastructure. Roads are generally getting worse and the water pipes and trunk sewers have their own special problems.

We suspect that a lot of the residential debt forgiven in the middle of last year and the commercial debt that might be forgiven now would have covered some of the investment required in infrastructure. But the capital requirements for this infrastructure can be calculated separately from the normal running costs and presented to residents.

A second set of questions must find out why councils allowed debts to build up by residents and businesses. There was a time when no one owed their council more than a month or two of bills. The councils took prompt action to have accounts paid as they fell due so there was no debate on debt forgiveness because there were no debts to forgive.

We suggested in July last year, when a lot of household debts to councils were forgiven, that councils and their residents should take that as an opportunity for a new start. Councils would not let debts resume and residents would pay their bills on time so that the huge unmanageable debts did not re-occur. It is clear that this did not happen.

Councils and their residents have lost touch with each other.
Self-appointed groups called residents’ associations do not fill the gap.

What is needed is for councillors to be far more active in their wards finding out what residents want, explaining what each need and each desire will cost, and then trying to form a consensus on minimum services plus a list of desired extras.

It is not even necessary that all wards have the same services above the basic minimum. Before the creation of greater Harare in the late 1960s each suburb or group of suburbs had its own mini-council and its own rates. Some, Highlands and Greendale for example, wanted full street lighting and residents agreed to pay for this. Others, such as Borrowdale and Waterfalls, thought the cost was excessive. There are good arguments for a central council, but a degree of flexibility in a large city is also desirable.

The debt crises and the policies of forgiveness in return for prompt future payment now give us an opportunity to think through a lot of policies and make decisions on fact and desires.