The City may have boasted about spending an impressive 90% of its Urban Settlement Development Grant but the money was not used for the upgrade of informal settlements and housing. Picture: Courtney Africa/African News Agency(ANA)
The City may have boasted about spending an impressive 90% of its Urban Settlement Development Grant but the money was not used for the upgrade of informal settlements and housing. Picture: Courtney Africa/African News Agency(ANA)

City of Cape Town criticised for using urban settlement grant for Covid-19 expenses

By Marvin Charles Time of article published Oct 29, 2020

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Cape Town – The City may have boasted about spending an impressive 90% of its Urban Settlement Development Grant (USDG) but the money was not used for the upgrade of informal settlements and housing. It was allocated to pay for Covid-19-related expenses.

Deputy mayor and Mayco member for finance Ian Neilson said: “Through endeavouring to immediately respond to the Covid-19 pandemic, national Treasury and the national Department of Human Settlements gave metros approval to use an element of the 2019/2020 USDG grant for targeted Covid-19 interventions for vulnerable communities and informal settlements. This was therefore to pay for the Covid-19-related expenses, primarily of enhanced basic service provision to informal settlements.”

Neilson said the City’s 2020/2021 USDG allocation was reduced by R144.45 million. The City’s USDG contractually committed funds to the amount of R145m were approved for roll-over by national Treasury thus resulting in additional funds being available to the City for the 2020/2021 financial year for its ongoing and committed projects.

“The City’s main mandate is to deliver basic services within acceptable national standards. To achieve such a high budget spend amid this crisis, shows the City is committed to fulfilling this mandate to the best of its ability,” said Neilson.

“The human settlements directorate spent 98% of its USDG capital budget in the 2019/2020 financial year despite the greatly negative Covid-19 and lockdown regulations’ impact on its programmes and operations.

“Likewise, both the transport and water and waste directorates spent 94% of their 2019/2020 USDG capital allocations.”

The City has come under fire in the past, both from President Cyril Ramaphosa and opposition parties, for not spending USDG funds on the upgrade of informal settlements.

ACDP caucus leader Grant Haskin said: “The City ought to have used USDG funding for its purpose, and funded its Covid-19 expenses from other sources including its extensive R18bn in cash reserves. The purpose of the USDG is to address substantial, worsening and long-standing urban settlement challenges. The City has risked further USDG funding by spending portions of it on the pandemic.”

ANC caucus leader Xolani Sotashe slammed the City over its track record on USDG spending. “It’s pathetic; their arrogance has now reached a low and the ones who suffer the most are the ones without homes and who are in need of basic services. They cannot blame Covid-19 for them not being able to spend their grants.”

Housing lobby group Ndifuna Ukwazi’s community organiser Buhle Neo Booi said: “We understand some funds have had to be diverted towards Covid-19 (but) this can not be the sole excuse for decade-old problems.

“Informal settlements were without water during this time, and some are living in sewer-flooded areas the most vulnerable communities were not serviced, so what Covid-19 response was funds used for when the majority of our people were left to suffer during this unprecedented period?”

Cape Argus

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