Barbara Creecy concerned by lack of spending in Gauteng
Municipalities in Gauteng province have spent only 77% of the R19bn earmarked for infrastructure development, a situation that has finance MEC Barbara Creecy worried.
Creecy painted a bleak picture on Thursday of the spending records of the municipalities, which include three of SA’s eight metros.
According to the unaudited financial statements for the 2017/2018 financial year, only two municipalities, Mogale City and Merafong, had spent more than 80% of their planned capital expenditure, while Johannesburg and Ekurhuleni spent 78% and the City of Tshwane 76%.
The preferred rate of expenditure was above 90%. Cumulatively, the municipalities spent R14.6bn of R19bn.
Creecy met mayoral committee members for finance from all municipalities to discuss the state of finances in local government, said a statement from her office. Co-operative governance, traditional affairs and human settlements MEC Dikgang Uhuru Moiloa also attended the meeting.
Creecy singled out Johannesburg for underspending, and also pointed to the lack of spending of the Urban Settlements Development Grant (USDG), given to metros for the development of bulk infrastructure for new settlements.
Gauteng has a severe housing and infrastructure backlog, while urbanisation in the province has ballooned.
Creecy said only 80% of the USDG was spent, which meant more than R1bn needed for new settlements was not used. "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."
Creecy added that by June, Gauteng municipalities were owed a total of R58bn for rates and services. Of this, residents owed R42bn and commercial enterprises R11.8bn. All levels of government together owed municipalities R1.4bn. Gauteng’s debt now stands at R489m.
The City of Johannesburg disputed Creecy’s numbers, saying the figure quoted stemmed from a submission of the city’s section 71 report, which was based on unaudited, preliminary financial information available at the time of submission on July 13 2018.
Finance mayoral committee member Funzela Ngobeni said the latest information, based on the fourth-quarter reports, reflects an updated spending level of 91% of the capital budget. He said 98.5% of the USDG was spent, which was "substantially higher" than the 73% reported by Creecy. Ngobeni said the decision to single out Joburg "would appear to be politically driven" and urged Creecy to reconsider her view.