Ian Clayton
Minister of Provincial Affairs and Constitutional Development Valli Moosa announced this week that the government’s allocation to local authorities would be R2,3-billion during the current financial year, an increase from the R2,1-billion allocated in the last financial year.
Moosa added that local authorities with greater need would “gradually” receive more direct government aid than others.
In the past, local governments received central aid through provincial governments, but in terms of the national government’s “equitable share” programme since the adoption of the new Constitution in 1996, this is no longer the case and the government’s support to local governments is not part of provincial budgets.
“These are rational and needs-based allocations to each and every municipality. They are no longer left to politicians,” Moosa said.
The direct flows to local governments from the national government total R2,3-billion this year – “a substantial figure”. This includes R1,2-billion to organised local governments and municipalities, apart from the towns which used to be in the homelands. These towns will receive R447-million during the current financial year but they will gradually lose this classification over five to seven years and be included in the “equitable” share of local government.
Moosa said a further R13,2-million from the “equitable share” for local governments had been allocated during the current financial year.
Metropolitan and larger urban municipalities had generally received less during the current financial year and rural municipalities generally received more according to the needs-based grant formula.
The Eastern Cape, the Free State, Mpumalanga, the Northern Cape, the Northern Province and the North-West had received higher allocations, while KwaZulu-Natal received increased allocations for rural areas and smaller allocations for the urban and metropolitan areas.
Moosa also said in the past few years local governments had been going through a series of changes aimed at deracialisation and democratisation and meeting the development challenges of the Reconstruction and Development Programme.
This reform process included the restructuring of the intergovernmental transfer system to local governments as a result of constitutional requirements and problems with the previous system.
The transfers to local governments were made in terms of an objective formula that embodied the principles of equity, efficiency and democracy. The new system assists municipalities with the operating costs of basic services for poor households – the so- called S grant – and enables them to build an administrative infrastructure – through the I grant.
It was not possible to introduce all the changes simultaneously and the phasing in of the new systems would take place over a five-year period for urban municipalities and a seven-year period for rural municipalities.
Moosa said the basic principle was that the “primary” municipality, which delivered the main essential or basic services, should receive the transfer from the government.
Payments to the municipalities would be made on a quarterly basis, within the first two weeks of the quarter, starting in July.
The Eastern Cape will get R302,6-million, the Free State R115,04-million, Gauteng R110,6- million, KwaZulu-Natal R215,9-million, Mpumalanga R82,6-million, the Northern Cape R71,2-million, the Northern Province R148,9-million, the North-West R92,06- million and the Western Cape R140,9- million.
Both Moosa and the chair of the South African Local Government Association, Collin Matjila, said they believed that progress had been made in ensuring that more households paid for services delivered by local authorities. Matjila added: “The situation in local government is not what it used to be, but we have made great strides in turning it around.”
Moosa also said payment would be encouraged by the planned redrawing of local government boundaries to make them more financially viable. The Municipal Demarcation Board had already begun its work.
Matjila praised the allocations as “a welcome and progressive step forward”, but the split in the allocation to national, provincial and local levels of government had to be addressed.