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The Portfolio Committee on Human Settlements, Water and Sanitation is concerned that governance challenges in metropolitan municipalities are having a direct impact on implementation of projects funded through the Urban Settlements Development Grant (USDG). The committee has resolved to urgently engage with provincial leadership together with leaders of these metros to find workable solutions to impediments in delivering USDG projects.

As a result of the underperformance in spending of this grant, the committee was today informed that National Treasury is in the process of invoking Section 19 (1)(b) of the Division of Revenue Act, which calls for the stopping of a transfer of an allocation or a portion to a municipality. This will amount to National Treasury withholding R1,7 billion of the USGD.

“While we are cognisant of the political challenges facing most metros we remain unhappy because the USDG is meant to deliver critical infrastructure, upgrade informal settlements and provide services, with the aim of eradicating the housing deficit by placing more focus on metros as the centres of economic growth. This is concerning and must be urgently resolved,” said Ms Machwene Semenya, the Chairperson of the committee.

According to the Department of Human Settlements, about 72% of the total allocation of the USDG has not been spent by the metros. Of the 12 045 386 voted funds for the USDG, the metros have only cumulatively spent 3 376 188. This is despite infrastructure backlogs in those metros that experience pressures due to urban migration. The committee has called for a recommitment and a concerted effort to spend the USDG.

The committee has noted that only Buffalo City and the City of Johannesburg (CoJ) have spent over 40% of the grant, with Buffalo City spending 40,5% and CoJ spending 43,8% of the grant to date. “While comparatively these two are better off, it is still concerning that there is no maximum implementation of the projects,” Ms Semenya said.

The Mangaung Metro has been flagged as the worst performing municipality on spending, with only 14,9% as of the third quarter of the financial year. The City of Tshwane has spent 21,2%, eThekwini has spent 22,7%, City of Cape Town has spent 27,3% of their allocated funds. “We are even more concerned that the department has informed the committee that the Municipal Emergency Housing Grant funding that has been made available to assist following floods in eThekwini, Nama Khoi Local Municipality, and the City of Tshwane has not been spent, despite the department urgently making those funds available. Service delivery is clearly suffering due to political instability within metros,” Ms Semenya emphasised.        

In relation to the Human Settlements Development Grants, the committee is concerned that some provinces are underperforming, resulting in losing funds to other provinces. Of major concern is that Free State will lose R118 million, Gauteng will lose R 250 million and Northern Cape will lose R26 million. This is funding that would have benefited the people within those provinces.
 
The committee has resolved to arrange a meeting with all metros to find solutions to the challenges they have in spending funding intended to improve the lives of the people.
 

Issued by the Parliamentary Communication Services on behalf of the Chairperson of the Portfolio Committee on Human Settlements, Water and Sanitation