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Cape Town - The City of Cape Town on Sunday rejected a newspaper report on its spending performance, saying the cut in the city’s Urban Settlement Development Grant (USDG) has nothing to do with the city’s spending performance.

The Weekend Argus (“DA-run metros fail to spend R540m meant to help the poor” – 25 March 2018) reported that the City of Cape Town had R176 million of its USDG cut due to poor spending performance, mayoral committee member for transport and urban development Brett Herron said.

"The decision to cut, or withhold, R176 million of our USDG clearly had nothing to do with our spending performance. This is evidenced by the fact that in June 2017, even before the commencement of our financial year, we received notification of a proposal to withhold R278 million of our USDG allocation.  Then in November 2017, just four months into our current financial year, we received another notification of a proposal to withhold R175.8 million of our USDG," he said.

Furthermore, the city was invited to make a presentation to parliament’s human settlements portfolio committee on March 6 and 13 on the spending of its USDG allocation.  

"I attended both presentations, along with senior officials from the city, where we demonstrated that we had fully allocated our USDG funding and that we had plans in place to fully spend it.

"Despite being invited to present our plans to spend the USDG funding allocation so that the portfolio committee could make recommendations to the department of human settlements, we received a letter confirming the withholding of R175.8 million on 12 March – the day before our final presentation to the committee. The decision had clearly already been made, regardless of what we were going to present," Herron said.

During the presentations to the committee the city disputed the suggestion that it was under-performing and pointed to the fact that actual spend was in line with planned spend for the financial year to date. This could be the only basis on which performance was measured.

The USDG funding was used to provide bulk infrastructure for integrated human settlements. It thus supported the city’s efforts to address the housing deficit and upgrade informal settlements.

"The withholding of funding, for whatever reason, has meant we have to re-phase planned projects to future years or slow down on projects that are currently underway. We will not cancel any USDG funded project and remain committed to employing our USDG funding allocation for the purpose it was intended – to construct the infrastructure needed to improve the quality of life for the poorest of our residents.

"The Weekend Argus reports that the city did not respond to its questions. I received no request for comment," Herron said.

African News Agency/ANA