Question NW3219 to the Minister of Human Settlements

Reply:

The Department of Human Settlements transfers the allocations for grants to nine Provinces and eight Metropolitan Municipalities. The Department does not transfer allocations for any grant to district municipalities as implied in the Honourable member’s question.

 

During the 2014/15 financial year, the department withheld the Municipal Human Settlements Capacity Grant (MHSCG) to six metropolitan municipalities until such time that Metropolitan Municipalities had demonstrated that they had spent this conditional grant for the purpose for which it was intended as envisaged in the relevant prescripts, in particular the Division of Revenue Act (DORA).

In actual fact Honourable member, the grant referred to in the question is not the only one giving my MECs and I sleepless nights. The misuse of the Urban Settlement Development Grant (USDG) is also worrisome. We need to review the grants framework to address serious anomalies. To illustrate my point, the USDG was introduced as a conditional grant to ensure the provision of bulk connector, link and internal services; well-located land and public amenities because we realised that these plagued the optimum performance of the human settlements sector. Metropolitan municipalities spend the USDG on other things such as roads, street lighting and social facilities when there are still bulk infrastructure constraints. This is frustrating to say the least.

The Honourable should be interested how this grant is used by the City of Cape Town allocated the USDG funds for 2014/15 financial year as indicated below:

Description	Allocated Budget	% Total Available Funds	Spent by Municipality	% Spent	Variance	% Unspent
	R’00		R’00		R’00
Electricity	231 698	14.1	189 286	81.7	42 412	18.3
Solid Waste Management	50 000	3.0	50 000	100.0		0.0
Water and Sanitation	195923	11.9	182 885	93.3	13 038	6.7
City Parks	30 595	1.9	24 797	81.0	5 798	19.0
Sport, Recreation and Amenities	41 636	2.5	34 423	82.7	7 213	17.3
Library and Information Services	23 644	1.4	23 644	100.0		0.0
Assets Management and Maintenance (Transport)	262 765	16.0	195 118	74.3	67 647	25.7
City Health Sub Districts	7 467	0.5	7 391	99.0	76	1.0
HS Development & Delivery	120 608	7.3	97 695	81.0	22 913	19.0
HS Planning and National Housing Programmes Development	419 900	25.5	416 727	99.2	3 173	0.8
Public Housing and Customer Services	42 674	2.6	27 853	65.3	14 821	34.7
HS Urbanisation	92 332	5.6	79 003	85.6	13 329	14.4
Disaster Risk Management	5 500	0.3	5 492	99.9	8	0.1
Spatial Planning and Urban Design	1 230	0.1	1 230	100.0		0.0
Provincial Allocation	49 048	3.0	49 048	100.0		0.0
Project Pre-Planning	68 405	4.2	24 964	36.5	43 441	63.5
Human Settlements - Title Deeds	500	0.0	343	68.6	157	31.4
Project Managemnet	1 500	0.1			1 500	100.0
VAT			72 031		- 72 031
Total	1 645 425	100.0	1 481 930	90.1	235 526	14.3

 

In summary, the table indicates the following:

• From the R1.6 billion total allocated budget, Human Settlements Planning is allocated a larger portion of R419.9 million or 25.5% whereas 99.2% of those funds were spent. The expenditure is attributable to land purchase amounting to R416.7 million.
• The second highest allocation is on Assets Management and Maintenance at R262.8 million or 16% of the total allocated budget of which only 74.3% of those funds were spent.
• At least four of the services spent 100% of their budget at year end i.e. Solid Waste Management, Library/Information Services, Spatial Planning/Urban Design and Provincial Allocations.

We are required intervene to ensure that we provide the much needed houses for our people. I will certainly not abdicate my responsibilities by not acting when funds are not spent in line with the DORA. Not a cent from the USDG should be used for amenities or stadium construction while housing infrastructure is lacking or in some cases is non-existent.