Government makes over R5-b in support available to municipalities

Government announced on 12 May that it has made available more than R5-billion to support municipalities, in response to the Covid-19 pandemic, for the 2019/20 municipal financial year.

The support is set to assist municipalities in providing vulnerable communities with access to basic services and the sanitation of public transport facilities.

According to a statement by the National Treasury, the largest amounts have been made available through the reallocation of funds from conditional grants that have already been allocated to municipalities in the 2019/20 municipal financial year.

“While the 2019/20 national and provincial financial years ended on 31 March, the municipal financial year runs until 30 June. This means that grant funds transferred from national government before the end of March could be spent by municipalities for a further three months,” said the statement.

The Treasury has granted approval for funds, not contractually committed, to be reallocated and used to respond to the Covid-19 pandemic.

According to the Treasury, in terms of Section 20(6) of the Division of Revenue Act 2019, these approved reallocations include:

• 4-b in Urban Settlements Development Grant allocations to metropolitan municipalities. These funds will be used for providing water and sanitation, mainly in under-serviced informal settlements and to cover the increased costs of more frequent waste management and other services.
• 5-b in Municipal Infrastructure Grant allocations for the provision of water and sanitation, which includes money for urgent maintenance which is needed to restore the functionality of water infrastructure.
• R970-m in Public Transport Network Grant allocations for the sanitisation of public transport facilities.
• R306-m in the indirect Regional Bulk Infrastructure Grant was reallocated at the end of the 2019/20 national financial year and transferred to Rand Water to fund the roll-out of water tanks to supply communities without reliable access to water services.

An additional R151-m has been approved for release from the Municipal Disaster Relief Grant to support non-metropolitan municipalities for the cost of sanitisation and increased provision of other municipal services.

The Treasury added that government will also support municipalities in relocating funds from other conditional grants that are projected to be underspent.

“Details of further support to municipalities in the 2020/21 municipal financial year will be announced when the Minister of Finance tables the special adjustment budget to respond to the Covid-19 pandemic that was announced by the president.”

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