UK

National Treasury has published on its website the operating and capital budgets of municipalities, as adopted by their respective councils. 

“These budgets give an overview of expected revenue and expenditure trends in local government over the next three years, referred to as the 2024/25 Medium Term Revenue and Expenditure Framework (MTREF),” National Treasury said on Wednesday.

The revenue and expenditure numbers are aggregated from the annual budgets that municipal managers are legally required to submit to National Treasury and the relevant Provincial Treasury.

The published information is presented in a variety of ways, including aggregated municipal budget totals for the 2024/25 financial year and over the medium-term period. 

In addition, the information is presented per category of municipality and province. 

Highlights include:
•    The aggregated budgeted revenue for 2024/25 is R652.3 billion, which is expected to increase to R687.2 billion in 2025/26 and R728.7 billion in 2026/27.
•    Total municipal expenditure in 2024/25 is estimated to be R649.9 billion, increasing to R682.7 billion in 2025/26 and R720.4 billion in 2026/27. Total expenditure for 2024/25 is 6.2% higher than the adopted budget for 2023/24 financial year.
•    It is notable that aggregate municipalities will realise operating deficits on the operating budgets in the 2024/25 financial year, as the total operating expenditure increases at a higher rate than the revenue projections. This is an indication that municipalities are living beyond their means and a first sign of financial challenges. However, the situation is projected to improve in the outer years of the 2024/25 MTREF, as operating surpluses will be realised.
•    A net deficit of R2.1 billion is projected in the 2024/25 financial year, after considering revenue from external loans and internally generated funds. This is an improvement compared to a deficit of R9.3 billion in the 2023/24 adjusted budget and will result in a net surplus of R520.4 million in 2025/26 and R4.3 billion in 2026/27.
•    The main cost drivers are employee related costs and materials, and bulk purchases, representing 26.9% and 34.5% of the operating expenditure, respectively. Municipalities are experiencing a two-fold impact of the high electricity and water tariff increases; lower sales levels owing to changes in consumption patterns and increased bad debt as a result of affordability pressures.
•    Capital expenditure increased by 1.8% to R77.4 billion in 2024/25, compared to the original budget for the 2023/24 financial year. The percentage of capital expenditure to total expenditure is declining over the MTREF period. Capital expenditure represented 12.4% of the total expenditure in 2023/24 and is projected to decrease to 11.9% in 2024/25 and further to 10% in 2026/27.
•    Trading services represent 51.5% of the total capital expenditure of R77.4 billion in 2024/25; increases to 51.9% in 2025/26 and to 54.3% in 2026/27.
•    The 2024/25 capital expenditure budget reflects a R47.1 billion investment in new infrastructure,which is 60.8% of the total aggregated capital budget. Investment in the renewal and upgrading of existing assets is much lower at R13.3 billion (17.2%) and R17 billion (22%) of the total capital budget respectively.
•    Reporting on operational repairs and maintenance figures has been institutionalised as part of Section 71 in-year reporting. Municipalities allocated R33.9 billion to repairs and maintenance of assets in 2024/25. This will increase to R35.6 billion in 2025/26 and to R37.1 billion in 2026/27.

National Treasury publishes Local Government MTREF information on an annual basis. 

“Regularly published budget information enables communities to hold their municipal councils to account. The information is also used by National Treasury as the basis for the In-Year Management, Monitoring and Reporting System for Local Government (IYM). 

“The Section 71 reports published by National Treasury give an account of actual revenue collection and spending by municipalities, per quarter, against their budgeted figures,” National Treasury said.

All this information feeds into Municipal Money -- the open local government data portal -- which can be accessed as follows: www.municipalmoney.gov.za. 

In addition, the Municipal Money time series data can be accessed directly from http://municipaldata.treasury.gov.za. 

A new development that facilitates transparency is the GoMuni portal, which can be accessed on https://lg.treasury.gov.za/ibi_apps/signin by clicking on the public access tab. -SAnews.gov.za