Johannsburg - Finance Minister Tito Mboweni has stopped the allocation of nearly R1billion in grants to five provinces that was meant for building and upgrading schools and houses.
The provinces - Gauteng, North West, Limpopo, Free State and Northern Cape - will lose a total of R935.2million due to their failure to spend their education infrastructure and human settlements development grants, Mboweni said.
The minister cited the provinces’ failure to spend over R434m in Gauteng; over R225.6m in North West; R113.3m in Limpopo; R118m in Free State; and R26m in Northern Cape.
The hundreds of millions of rand in grants, allocated for education infrastructure and human settlements development, have now been re-allocated to other provinces: the Eastern Cape, KwaZulu-Natal, Mpumalanga and the Western Cape.
Gauteng’s grants include education infrastructure R184.3m; and R250m in human settlements development.
The education infrastructure grant will now be re-allocated to the Eastern Cape of almost R129m; R100m to KwaZulu-Natal; and over R313.3m to Mpumalanga.
The education infrastructure grant helps accelerate construction, maintenance, upgrading and rehabilitation of new and existing infrastructure in education, district and circuit accommodation, and enhancing the capacity to deliver infrastructure in education.
It is also supposed to be used to repair damaged infrastructure, and the achievement of the targets set out in the minimum norms and standards for school infrastructure.
The human settlements development grant is to be shared by the Eastern Cape, KwaZulu-Natal, Mpumalanga and the Western Cape, with each receiving R98.5m.
Gauteng human settlements, urban planning, co-operative governance and traditional affairs MEC Lebogang Maile described the loss of the R250m human settlements development grant as “a huge setback, as the province has a 1.2 million housing backlog due to in-migration and mass influx of people, as well as being the country’s economic powerhouse”.
He said the province had limited resources and budget constraints, and that the withdrawal of these funds would have a negative impact on its housing targets and service delivery expectations.
“We have reorganised ourselves in terms of filling key positions, such the appointment of new heads of departments and a chief financial officer for purposes of leadership and accountability,” Maile said.
He added that his department has since adopted a new approach and perfected its spending model, so that this does not recur in the near future.
The human settlements development grant provides funding for the progressive realisation of access to adequate housing through the creation of sustainable and integrated human settlements; and facilitates programmes and an inclusive approach to upgrading informal settlements.
In the notice to halt the allocations, Mboweni said he made the decision in terms of sections 19 and 20 of the Division of Revenue Act (DoRA), which empowers him to stop the flow of funds and re-allocate them to other provinces.
DoRA allows for the stopping of allocations to provinces when there is a serious or persistent material breach of the act, as well as the Constitution.