1. 1 Presentation to the Select Committee on Appropriations Devolution of Property Rate Funds Grant NATIONAL TREASURY 7 May 2010

2. 2 Public Works, Roads and Transport– Provinces as at 31 December 2009

3. 3 Spending is at R25.8bn or 68.7% against R37.6bn adjusted budget –12.4% of total provincial adjusted budgets –Increase of R1bn or 4.2% compared to same period of last year WC – 38.2%; KZN and LP – 13.5% Projected overspending of R620m in 4 provinces (NW – R297.5m ;GP – R201m) Personnel spending at R4.7bn or 73.9% (R6.3bn adjusted budget) –Projected overspending of R195m in 4 provinces (GP – R138.1m; LP – R29.3m) Capital spending at R5.3bn or 68.2% –Projected underspending of R340.1m in 5 provinces (EC – R133.9m; NC – R103m; FS – R84.9m) –Low rate of capital spending in NC (6.6%) and LP (39.6%) –GP (121%) and NW (88.4%) reflects the highest rate of capital spending Public Works, Roads and Transport – Provinces as at 31 December 2009

4. 4 Public Works, Roads and Transport– Provinces as at 31 March 2010

5. 5 Spending is at R36.8bn or 97.6% against R37.7bn adjusted budget –12.4% of total provincial adjusted budgets –Increase of R3.9bn or 11.8% compared to same period of last year WC – 39.7%; MPU – 20.7% and FS – 19% Preliminary underspending of R972.9m in 8 provinces LP – R388.2m; WC – 304.9m and EC – R90m Personnel spending at R6.4bn or 101.8% (R6.3bn adjusted budget) –Preliminary overspending of R195m in 3 provinces (GP – R118.2m; LP – R50m and EC – 27.2 ) Capital spending at R7.7bn or 99.7% –Preliminary underspending of R309.4m in 4 provinces (WC – R176.5m; FS – R102.1m and LP – R30.3 ) –Low rate of capital spending in FS (87%) and LP (87.2%) –NC (120.9%) and EC (105.5%) reflects the highest rate of capital spending Public Works, Roads and Transport – Provinces as at 31 March 2010

6. 6 CG: Devolution of Property Rate Funds Grant

7. 7 Devolution of Property Rates Funds Grant

8. 8 Concluding Comments Provincial public works departments are responsible for the payment of municipal property rates for all departments in a province. Failure to do this may lead to a termination or disruption of services such as water and electricity Outcomes have deteriorated since 2008/09, where under-spending was just over R202m. Spending on this grant is highly reliant on the rating and billing capacities of municipalities. Poor municipal property management, poor billing systems, late billing, etc. influence negatively on a province’s ability to meet its obligations. Provinces with former “homeland” government structures within their jurisdiction are particularly negatively affected, due to the incomplete rating of properties in these areas. The budget for this grant was adjusted upwards by R353.2m in 2009/10, due to the under-funding of certain provinces. Reasonably accurate baselines going forward are essential before the devolution process can be completed.