Tool: Red Tape Reduction (RTR)


What is Red Tape?

Red tape refers to rules, regulations, and / or bureaucratic procedures and processes which are excessively complex and which impose unnecessary delay(s), inaction and / or costs which exceed their benefits, and / or is no longer effective in achieving the purpose for which they were originally created. Red tape results in undesirable economic, business and / or social impacts or outcomes as a result of negatively impacting on productivity. Red tape involves excessive, or unevenly enforced, regulation or rigid conformity to formal rules that is considered redundant or bureaucratic and hinders or prevents effective action or decision-making (Source: DTI & CoGTA Guidelines for Reducing Municipal Red Tape, 2012) .

The term red tape originates from the red ribbons that were used as early as the 1600s to bind files of government papers together and to indicate which files were priority matters for discussion.

Tool: Local Red Tape Reduction (LRTR)

Local Red Tape Reduction (LRTR) is a tool that aims to assist local stakeholders understand the importance of improving the local business environment by looking at the regulations and process that  govern it. These instruments specifically considers the interface between local government and the local business community and often results in the initiation of a change process within local government ultimately aimed at improving service delivery.

Red Tape and the Informal Sector

In most developing economies, at least one third of entrepreneurs are informal, and thus are trapped in activities characterised by low productivity, limited access to finance and services, and a limited capacity to expand. Thus, informality many times represents a missed opportunity for faster economic growth and better income distribution, let alone functioning markets and rule of law. It is therefore important to ask the question of how informality and the regulatory environment are linked, and what improvements to the regulatory environment could produce incentives for formalization. 

Guidelines for Reducing Municipal Red Tape - How Municipalities can Improve Service Delivery that Supports Small Business

The Department of Trade and Industry (DTI) and the Department of Cooperative Governance and Traditional Affairs (CoGTA) are currently in the process of developing Guidelines for Reducing Municipal Red Tape - How Municipalities can Improve Service Delivery that Supports Small Business.

Municipalities are at the coal face of service delivery, the place where citizens most often come into contact with government. The quality of municipal service delivery has a great impact on most people’s quality of life. It also has a big impact on businesses across South Africa. But it is small business that is most vulnerable to poor municipal service delivery and red tape because small businesses have less staff, administrative, and financial resources to spend on dealing with red tape.

Municipal managers are understandably focused on ensuring their municipalities abide by all relevant legislation. Much of their attention and energy is focused on improving municipal financial audit results, and not on reducing red tape. But, Municipal Managers need to realise that it is possible to both improve both audit ratings as well as reduce red tape by focusing on business process management and using supportive software tools which both reduce the burden of compliance and improve customer service using existing staff resources.

Red tape makes it difficult for businesses to succeed, grow, create jobs, and invest in infrastructure and development. Red tape is often caused by a range of factors which include people’s values; out-dated or inappropriate policies, rules and regulations; inefficient processes and systems, poor management, and staff skills shortages.

The guidelines contain practical tools and guidelines for both municipal officials, as well as businesses, to use to reduce red tape. These tools include an approach to business process management and continuous improvement, as well as examples of red tape reduction action plans and useful resources which deal with common municipal red tape issues such as:
  • Improving Municipal Service Delivery through Citizen Service Charters and Complaints Notification Systems; 
  • Improving Municipal Communication; 
  • Improving Municipal Regulations; 
  • Improving Supply Chain Management and Procurement; 
  • Supporting Efficient Land Development; 
  • Improving Building Plan Approval time-frames; 
  • Managing Informal Trading

By adopting business process management approaches, Municipalities can move up the ladder of service delivery excellence as they become more sophisticated at managing key service delivery processes.

Understanding Red Tape and the Importance of Red Tape Reduction

Most of us have experienced, or heard of, red tape. Nobody likes red tape. It frustrates us from getting things done, it wastes our time, and / or it costs us unnecessary money. It also holds back entrepreneurs and business people, economic growth, job creation, and poverty reduction in South Africa by contributing towards lost investment and business failure and / or reduced business competitiveness and growth.

Municipalities have a critical role to play in South Africa in providing efficient and effective basic services which contribute towards an effective environment for doing business. But there are many challenges facing municipalities. The guidelines are designed to help municipal officials and Councillors, residents, and businesses to play a role in reducing red tape and contribute towards improved service delivery, job-creation and poverty-reduction.

The guidelines do not deal with all possible kinds of municipal red tape. Instead, they:

  • Provide general guidelines for reducing red tape; 
  • Provide specific guidelines for reducing selected red tape issues which are impacting on small businesses across South Africa.

The guidelines contain the following sections:

  • Section 1 provides general RTR guidelines by looking at the steps that can be followed to achieve successful RTR. Broad business process management guidelines are also provided to assist municipalities to become organisations which aim to constantly improve their processes.
  • Section 2 provides issue-specific guidelines for the following red tape issues: Municipal Regulations; Supply Chain Management; Land development; Building Plan approval; Informal trading.

Practical Knowledge

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Theoretical Knowledge

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