A huge revenue collection gap in the City of Joburg was thrust into the spotlight this week during the release of a South African Cities Network report into municipal finances.
The report reviewed nine of the biggest municipalities.
It revealed that in the 2016/17 financial year, the City of Joburg spent only R1.9billion of its property, plant and equipment (PPE) budget on repairs and maintenance, falling short of the budgeted R4.8bn.
The shortfall was caused by the council’s failure to collect budgeted revenue, stated the report.
It warned that the sustainability of service delivery and infrastructure would be compromised if underspending on the PPE budget persisted.
The National Treasury has set a national norm that municipalities should budget to spend at least 8% of the value of PPE on maintenance.
The PPE budget includes long-term assets such as vehicles, machinery and buildings.
“The level of spending on repairs and maintenance is a good indicator of a city’s efforts to protect its infrastructure base and ensure the sustainability of services,” says the report.