24 Feb 2016
On Wednesday, 24 February the Minister of Finance Pravin Gordhan tabled his 2016 budget speech to parliament.
Minister Gordhan says governemt mindful that municipalities face growing pressures from both the rising cost of bulk services and rapidly growing numbers of households. Minister Gordhan said the Municipal capital spending exceeded R53 billion in 2014/15 yet there is underspending of infrastructure grants in many municipalities.
He said a review of these grants has led to several proposals for improvement:
- Grant frameworks will in future allow for refurbishment of assets, recognising the long-term nature of municipal infrastructure.
- Water sector grants will be restructured to reduce duplication and the associated administrative burden.
- Refinements are proposed to take into account the diverse challenges of urban and rural areas, and different-sized towns and cities.
- Public transport transfers to cities will now be allocated through a formula, bringing greater certainty and sustainability to these funding arrangements..
Minister Gordhan said this year brings South Africa’s fourth fully democratic local government elections and in recognition of this, the National Treasury will launch a data portal to provide all stakeholders with comparable, verified information on municipal financial and non-financial performance. “I hope this will further stimulate citizen involvement in local governance,” he said. Minister Gordhan said the elections will also see a significant change in municipal demarcations. He said the number of municipalities will be reduced from 278 to 257, with the objective of The “Back to Basics” programme launched in 2014, aimed at improving service delivery performance of municipalities. “The “Back to Basics” programme is entering its second phase of implementation. It involves active monitoring of performance in governance and service delivery, support to struggling municipality and stronger accountability measures,” he said.