SALGA warns service delivery at risk as Treasury withholds funds from 75 municipalities

The South African Local Government Association (SALGA) says that by withholding the equitable share from 75 municipalities across the country, the National Treasury is compromising their ability to provide services.

National Treasury has been withholding quarterly payments from the fiscus to municipalities, many of which are heavily indebted to bulk service providers, in an effort to ensure they settle their debts.

SALGA is appealing to the treasury to urgently release the December tranche, accusing it of failing to communicate adequately with the defaulting municipalities.

With billions in debt owed to Eskom and water boards, the treasury has invoked sections of the Constitution and the Municipal Finance Management Act by freezing funding to municipalities, attempting to compel them to manage their finances and settle outstanding debts.

The equitable share is unconditional funding from the fiscus, intended to help municipalities deliver basic services to poor households and run their administrations.

Salga says it has made several attempts o engage with National Treasury to ensure municipalities comply with legislative requirements ahead of the December transfer window.

“Despite SALGA’s repeated efforts, the National Treasury did not provide the necessary cooperation. This hindered SALGA’s ability to help municipalities address compliance issues and avoid the withholding of funds,” the organisation says.

SALGA claims that the treasury has not adequately communicated deadlines for addressing non-compliance and has not been clear about the information it requires from municipalities to verify compliance.

The association further claims that the treasury does not provide adequate feedback when municipalities respond to requests for information.

Treasury says it needs more time to respond to SALGA’s claims.

SALGA says it wants to see the treasury act more fairly across government, by also clamping down on departments and other entities that owe municipalities for unpaid services.