Cape Town MMC for Transport and Urban Development, Brett Herron, says he strongly disapproves of National Treasury’s unilateral decision to cut the City’s Urban Settlement Development Grant (USDG).

Herron says treasury’s decision to cut the USDG funding by R176 million for the current financial year, which comes to an end on 30 June 2018, will hamper the City’s efforts to provide much-needed infrastructure improvements to those in need.

According to Herron national government made the decision a month before the start of the current financial year.

“We were informed in June 2017 already of National Government’s intention of withholding R278 millions of our USDG allocation for the current financial year which commenced on 1 July 2017. In November 2017 we received another notification that R175.8 million of our USDG funding will be withheld. Then, on 12 March 2018, we received written confirmation that our USDG funding will be cut by R176 million,” Herron says.

The impact

The TDA’s USDG funding for 2017/18 has been reduced from R1 666 224 038 to R1 562 428 134, amounting to a reduction of R103 795 904 or 6.2%. Herron notes that the cut will have an impact on the city’s current budget for:

  • asset management and maintenance – a reduction of R989 385
  • the rehabilitation of roads and stormwater infrastructure, and the provision of new roads for housing developments – a reduction of R55,7 million; and
  • the planning and implementation of housing projects – a reduction of R47 million

Herron says the City will not cancel any USDG-funded project as a result of the cuts.

“We remain committed to using our USDG funding allocation for the purpose it was intended – to construct the infrastructure needed to improve the quality of life of Cape Town’s poorest households,” he concludes.


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