R886m of housing budget unspent

Cape Town - MPs said they were “sick to the stomach” when they heard that as much as R886 million of the human settlements budget was likely to remain unspent by the end of the fiscal year and be surrendered to the Treasury.

“I look forward to the day, maybe I won’t be here, when we come with a report where we’re up to date with everything, people are getting delivery on the ground,” said ANC MP Gloria Borman, after the Human Settlements Department had presented a report in Parliament on Wednesday on its underexpenditure.

“I feel sick to my stomach when I think of the money that is not being spent. I hear all the reasons – we’ve heard them all before – but when you see the need out there and how people are struggling, it’s very sad,” Borman said.

Stevens Mokgalapa, of the DA, shared her views. “The bottom line is that underspending is continuing and the demand out there is huge. We all know that housing is in demand and you see that a lot of unspent monies are taken back, it’s quite sad,” he said.

The main culprits were the provincial departments of Limpopo and the Eastern Cape, which are set to forfeit R294m and R284m respectively of the Human Settlements Development Grant they had been unable to use.

The national department was set to surrender R144m of its operational budget, while spending for the Rural Household Infrastructure Grant, intended for sanitation, would fall short by R164m. The R886m total represents 4 percent of the human settlements budget of R25bn.

Chief financial officer Funani Matlatsi said the figures were based on projections for the end of the fiscal year, and could improve if delivery was found to have exceeded expectations, especially in errant provinces.

Director-general Thabane Zulu said a decision would be taken on Friday, based on the latest figures, on whether to transfer the outstanding amounts to Limpopo and the Eastern Cape, but this seemed unlikely.

“The decision we arrived at was, if we can’t find existing projects within the pipeline plans, the money must go back to the fiscus. That’s a principle position. Don’t dump the money. Declare the money as savings.”

Zulu said the department had first intervened in October, after establishing that there was a high risk of underspending.

The department had gone as far as demanding to see a cash-flow process in provincial planning “because that’s then guaranteeing the spending”.

“It still didn’t happen. I’m sorry to say, we can only go as far as that in providing leadership,” Zulu said.

But Mokgalapa accused the department of “flip-flopping” on whether it would release the funds.

This would amount to “fiscal dumping” – spending leftover funds on unplanned items so as not to have it subtracted from the baseline for the following budget.

“I wish you wouldn’t refer to savings – it’s underspending,” said Borman.

- IOL