Funding Cuts for Provincial Housing Delivery Must Be Reversed

The Western Cape Government (WCG) strongly disputes the National Department of Human Settlements’ (NDHS) decision to cut R200 million from the Western Cape’s Human Settlements Development Grant (HSDG) and R100 million from its Informal Settlements Upgrading Partnership Grant (ISUPG). This reckless move threatens service delivery, undermines housing projects, and places at risk thousands of residents in need of housing.

Since October 2024, the Western Cape Department of Infrastructure (DOI) has engaged extensively with the NDHS, providing detailed reports and responses on grant expenditure and project progress. The NDHS itself confirmed that the DOI’s adjusted 2024/25 business plan was approved as communicated to DOI on 15 January 2025, acknowledging the province’s strong delivery and supporting DOI’s adjusted business plan.

There is no factual analysis of expenditure, performance, or population growth to justify this decision, and the WCG has had no opportunity to provide input or challenge these budget cuts, despite submitting comprehensive reports. It seems that this decision was taken based on the second quarter of a provincial department’s financial year, and the first quarter of a municipal financial year, further demonstrating the irrationality of the decision.

The WCG had ensured that the full human settlements grant allocation of R1.987 billion was accounted for in the delivery and payment processes before this budget cut was communicated and as per the approved adjusted human settlements business plan.

Minister Simmers said, “Due to these forced budget cuts, we will not be able to process payment of R111.930 million claims against the grants, and, in addition, claims amounting to R188 million are still expected before the end of the financial year. The province is delivering in accordance with its strategy, and at the last minute our efforts are being sabotaged.”

What makes this even more alarming is the lack of proper governance and consultation. Provinces were only informed of the budget cuts in a Technical MINMEC meeting on 21 February 2025, yet these cuts have not even been formally approved at the executive level, with the matter only set to be tabled at the upcoming MINMEC on 11 March 2025.

This means that national government is enforcing budget reductions without proper consultation, which is a shocking disregard for due process. Even more contradictory is the fact that the DHS approved the province’s amended business plan in January 2025, confirming the allocations, only to withdraw the funding at the last minute. This places critical projects at risk and exposes the DOI and Western Cape municipalities at risk of potential audit findings through no fault of their own.

Minister Simmers concluded, “Ultimately, the people who will suffer most from this irresponsible decision are the residents of the Western Cape – those in desperate need of housing. We remain committed to ensuring that all housing and infrastructure grants are effectively managed to maximise service delivery and support sustainable human settlements. We, therefore, demand that the NDHS reverses this decision and follows a fair, transparent, and evidence-based approach to funding allocations. I will also be tabling this matter with the Premier of the Western Cape and the provincial cabinet to consider our options in this matter.”