National Treasury has today released local government's budget statement for the second quarter of the 2010/11 financial year. The statement covers revenue and expenditure as well as spending of conditional grants for the period 1 July to 31 December 2010.
All information in this statement is based on the section 71 MFMA reports that Municipal Managers and Chief Financial Officers were required to sign and submit to the National Treasury by 11 February 2011. Any queries on the figures in the statement should therefore be referred to the relevant Municipal Manager or Chief Financial Officer. Queries on conditional grants may be referred to the national department responsible for administering the grant.
The number of municipalities that submitted reports increased to 282 in the second quarter of 2010/11 from 276 in the first quarter of 2010/11. This increase in coverage can be partly attributed to increased capacity building by National Treasury and the provincial treasuries.
As at 31 December 2010, municipalities had in aggregate spent 42.6 per cent or R99.5 billion of the R233.7 billion total approved budget. The total revenue budget amounted to R244.5 billion for 2010/11, of which aggregated billing accounted for R116.9 billion or 47.8 per cent.
Metropolitan municipalities had billed R63.1 billion or 44.9 per cent of their total revenue budget of R140.6 billion by the end of the second quarter. Ekurhuleni had billed the highest proportion of its revenue at 48.5 per cent, followed by City of Johannesburg at 46.1 per cent.
The aggregated capital budget for all municipalities for 2010/11 is R41.1 billion, of which R13.1 billion or 31.9 per cent had been spent by the end of the second quarter. The aggregated capital budget of metropolitan municipalities amounted to R19.6 billion, of which R5.8 billion or 29.9 per cent had been spent by 31 December 2010. Most metros had spent less than 30.0 per cent of their capital budget in the second quarter. The City of Tshwane had the lowest capital spending rate at only 20.8 per cent, with expenditure at Ekurhuleni Metro not far behind at 25.0 per cent.
Aggregated municipal consumer debts amounted to R62.3 billion as at 31 December 2010. Of this, households accounted for the largest component at R38.3 billion or 61.9 per cent of the total and government accounted for R3.1 billion or 5.1 per cent.
Metropolitan municipalities were owed a total of R34.6 billion as at 31 December 2010. This is an increase of R3.3 billion or 10.6 per cent over the same period last year. The biggest percentage growth from the previous year is in the City of Johannesburg, where it increased by 19.8 per cent or R1.8 billion. Ekurhuleni Metro's debtors book increased by 12.6 per cent or R973 million.
Secondary cities were owed R11.6 billion, an increase of R1.4 million or 1 per cent from the corresponding period last year. Households accounted for R8.4 billion or 71.7 per cent of the total.
The creditor age analysis shows that municipalities owed R10.7 billion as at 31 December 2010. This is R400 million more than the R10.3 billion owed at the end of the first quarter of 2010/11. North West had the highest percentage of creditors outstanding for more than 90 days at 59.3 per cent, followed by the Northern Cape at 45.8 per cent, Limpopo at 40.1 per cent and Free State at 27.1 per cent. The creditor age analysis results differ vastly from quarter to quarter.
The Division of Revenue Act, 2010 (Act No.1 of 2010) allocated R51.9 billion in transfers to local government. This consists of the unconditional transfer (Equitable Share) of R30.2 billion and conditional transfers of R21.7 billion. The conditional transfers consists of direct conditional grants to municipalities of R17.9 billion and allocations-in-kind of R3.8 billion. It should be noted that the direct conditional grant amount of R17.9 billion does not include the MIG cities to metropolitan municipalities as they are required to report performance on the entire capital programme.
By the end of the second quarter national departments administering conditional grants had transferred R12.7 billion or 71.3 per cent of the direct conditional grants to municipalities. According to expenditure reports from national departments, municipalities had spent only 48 per cent by the end of the second quarter. However, municipalities receiving direct conditional grants reported second quarter aggregate expenditure of R5.9 billion or just 33.2 per cent of the R17.9 billion conditional grants allocated to municipalities.
The Local Government Financial Management Grant, Rural Transport Grant and Water Services Operating and Transfer Subsidy Grant reflect spending levels of more than 50 per cent while the Neighbourhood Development Partnership Grant, Public Transport Infrastructure and Systems Grant, Electricity Demand Side Management Grant and Municipal Drought Relief Grant reported expenditures of less than 25 per cent at the end of December 2010.
The expenditure of 33.2 per cent reported by municipalities for the second quarter period excludes the amounts that the metros may have spent in relation to the Municipal Infrastructure Grant (MIG Cities).
b. High-level summary of revenue for 282 municipalities; and c. High-level summary of expenditure for 282 municipalities.
f. Conditional Grant summary - Top 21 municipalities; g.
h. Conditional Grant summary - Provinces; and i. Analysis of Sources of Revenue - 282 municipalities.