The City of Ekurhuleni has returned R9.5 million in unspent conditional grants to the National Treasury, raising concerns over service delivery delays in critical sectors such as human settlements, healthcare, and libraries. This follows a broader trend across South African municipalities, which have collectively sent back over R18 million in unutilized funds over the past five years.
Underspending Despite High Demand
Local government expert Trevor Fowler, a commissioner at the Financial and Fiscal Commission (FFC), explained that while Ekurhuleni’s underspending was relatively low compared to other metros, persistent inefficiencies in grant expenditure remain a nationwide issue.
Fowler noted that Ekurhuleni’s underspending was largely due to delayed project initiation, with only 2.5% of the human settlements grant spent in the first quarter—far below the expected 15-25%. “Late procurement and planning processes hinder municipalities from utilizing funds effectively,” he said.
Breakdown of Underspending
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Urban Settlement Development Grant: R1.3 million underspent (0.1% of R1.2 billion budget)
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Libraries Grant: R820,995 underspent (3.67% of R22 million budget)
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Neighborhood Development Partnership Grant: R777,477 underspent (1.5% of R52 million budget)
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Human Settlements Development Grant: R6.1 million underspent (6.7% of R91.2 million budget)
Fowler emphasized that while some underspending fell within the acceptable 5% margin, the human settlements grant’s higher underspending rate pointed to systemic planning failures.
Challenges in Municipal Governance
Fowler attributed underspending to a mix of administrative inefficiencies, political instability, and a lack of skilled personnel—particularly in rural municipalities. “Metros like Ekurhuleni have fewer excuses because they can attract expertise, whereas smaller towns struggle to retain qualified staff,” he said.
Coalition governments in major metros like Johannesburg and Tshwane have exacerbated instability, with frequent leadership changes disrupting service delivery. Johannesburg alone has had nine mayors and five municipal managers since 2016, creating a vacuum in governance.
Calls for Intervention
Fowler urged stronger support from provincial and national governments under Section 154 of the Constitution, which mandates higher tiers of government to assist struggling municipalities. He cited the recent establishment of a presidential working group for Johannesburg as a step in the right direction but stressed the need for long-term solutions.
“The focus should be on stabilizing administrations and ensuring political parties prioritize service delivery over power struggles,” Fowler said.
Impact on Communities
The failure to spend allocated grants has direct consequences for residents, particularly in poor communities where housing, healthcare, and infrastructure remain underfunded. Fowler warned that while Treasury may view unspent funds as “savings,” the real cost is delayed development and worsening inequality.
As municipalities grapple with these challenges, the question remains: Will stronger oversight and intergovernmental support translate into better spending—and better lives for South Africa’s most vulnerable citizens?
