THE South African Local Government Association (Salga) has reiterated its call for the equitable share formula, which is used to allocate funding to the country’s municipalities, to be reviewed urgently because it leaves metros such as Cape Town underfunded.
The local government equitable share, which is divided among 278 municipalities, is an allowance for basic services, community services and administration.
Salga Western Cape chairman Demetri Qually said at the weekend the financial sustainability of local government was a challenge. “The funding model of local government as proposed in the Local Government white paper should be reviewed and Salga is consistently discussing the issue of unfunded and underfunded (municipalities) and sustainability of local government in the national budget forum,” said Mr Qually.
Local government’s share of the national budget is about 9%. More was needed given the infrastructure and services delivered by municipalities, compared with other spheres of government.
Cape Town mayor Patricia de Lille has previously bemoaned the inadequate annual allocation the city receives from the national government, saying it was insufficient to meet the growing service needs of the city.
“People are moving to Cape Town in search of opportunities as confirmed by the census, (but) national government is giving more money to smaller municipalities away from the metros,” Ms de Lille said recently.
Mr Qually said revenue collection by Western Cape municipalities averaged 96%. The 9.4% electricity tariff increase awarded to Eskom would put municipal revenue under pressure.