Finance MEC expresses concern about lack of infrastructure spending by municipalities

Gauteg MEC for Finance Barbra Creecy. Photo: Supplied.

GAUTENG. – Finance MEC Barbara Creecy today expressed great concern about poor spending of infrastructure budgets by municipalities in the province, adding that this impacts negatively on the quality of public facilities and job creation.

MEC Creecy said this during a meeting with MMCs of Finance from all municipalities in the province to discuss the state of finances in the local sphere of government. The meeting was also attended by MEC for Cooperative Governance, Traditional Affairs and Human Settlements Dikgang Uhuru Moiloa

Unaudited figures for the end of the municipal financial year in June 2018, reveal that municipalities had collectively spent only 77% of their combined infrastructure budget amounting to R14.6 billion out of a total R19 billion. This means an under spending of almost four and a half billion in a situation where there are infrastructure backlogs throughout the province.

Of equal concern is the lack of spending on the Urban Settlement Development Grant which is given to the Metropolitan municipalities for the development of bulk infrastructure for new human settlements. Only 80% of this grant was spent meaning that more than a billion rand desperately needed for new settlements was not used. The City of Johannesburg spent only 73% of their grant despite their allocation having already been reduced by R363 million earlier this year.

“It is immoral to underspend on the USDG in a city where hundreds of thousands live in squalid informal settlements. These residents are totally dependent on the municipality to implement bulk services so that much needed houses can be constructed for them,” MEC Creecy said.

As at June this year, Gauteng municipalities were owed a total of R58 billion for rates and services. Of this, residents owed R42 billion and commercial enterprises owed R11.8 billion. All levels of government together owed municipalities R1.4 billion. Gauteng’s current debt stands at R489 million.

By April provincial government had paid R339.7 million to municipalities for rates and taxes, of which R290 million was for the 2017/18 financial year. At the end of June provincial government paid a total of R81 million for municipal services.

Creecy urged all municipalities to work with the Debt Management Committee to submit invoices timeously and verify outstanding queries. Creecy congratulated Rand West City Local Municipality and Merafong City Local Municipality for continuing to honour their payment arrangements with Eskom and Rand Water.


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