The government departments that owe municipalities could lose a huge chunk from the budget towards settling the R21 billion debt owed to municipalities.
That is if the Department of Co-operative Governance and Traditional Affairs (Cogta) has its way in attempting to get government departments to pay for municipal services.
The plan to recoup from government departments was announced when Cogta Minister Velenkosini Hlabisa disclosed during the question and answer session in the National Assembly that the Cabinet committee approved that he write to the departments asking them to pay up.
“I will write to all of them and we will give them a period of not more than four months to pay, and if they do not pay, I will visit the Minister of Finance to institute a way to tap in the money of departments who owe municipalities but do not pay municipalities,” Hlabisa said.
The National Treasury’s classification of municipalities shows that there are currently 157 municipalities that are financially distressed.
Cogta has put the figure at 35 and 161 were at risk in terms of its own classification.
The frail financial state of these municipalities has largely been attributed to the debt owed by the government and the poor or no revenue base.
Hlabisa also said his ministry would ensure all municipalities institutionalise the efficient credit control and debt collection procedures.
“We will ensure that every municipality produces its own indigent register so that they know who is exempted from paying what he receives from the municipality as a service and those that are due for payment,” he said.
Hlabisa believes that financially viable municipalities are those that are able to collect money from the customers for the services that are rendered.
The minister was planning to engage with business to pay for services rendered and also get households to pay up.
DA MP Marina van Zyl said the auditor-general’s 2022-23 local government audit report found that municipalities owe Eskom R40.19 billion and the water boards R19.59bn, and at the same time the government departments owed massive amounts to councils.
“It is very clear that inter-governmental relations do not work as they should.
“This remains a cycle whereby if a municipality delivers services to communities and governments, they should be able to collect the debt owed to it. This in turn, in an ideal world, is how service delivery can happen in an effective manner,” Van Zyl said.
Hlabisa, who leads an Inter-Ministerial Team of the Cabinet, has indicated that a turnaround plan will address critical issues in order to assist municipalities that were unable or fail to deliver services.
“We are open to suggestions on how to turn things around and make services efficient. The turnaround plan, when tabled, will address all these critical issues,” he said, referring to audit outcomes in council among others.
Cape Times