Provinces and metros hand back substantial funds
South Africa's Department of Human Settlements is rolling out a raft of interventions designed to tackle chronic underspending of housing grants and accelerate the delivery of homes and essential infrastructure across the country.
Human Settlements Minister Thembi Simelane, fielding oral questions in the National Council of Provinces on Tuesday, outlined measures intended to ensure that budgeted allocations translate into tangible outcomes — serviced sites, completed housing units and bulk infrastructure — while curbing the return of unspent funds at every tier of government.
The Minister disclosed that provinces and metropolitan municipalities surrendered millions of rands in unused Human Settlements grants during the 2024/25 financial year. At provincial level, R8.801 million from two principal grants was paid back to the National Revenue Fund — R5.951 million from the Human Settlements Development Grant (HSDG) and R2.850 million from the Informal Settlements Upgrading Partnership Grant (ISUPG).
Gauteng was responsible for the bulk of unspent HSDG allocations, returning R5.529 million, with Mpumalanga and Limpopo also among the provinces that failed to utilise their full budgets. Under the provincial ISUPG, Gauteng once again topped the list at R2.553 million, while the Free State, North West, Northern Cape and Eastern Cape also returned portions of their allocations.
The picture at municipal level was considerably worse, with a combined R174.873 million handed back across two grant streams. Of this, R105.866 million came from the Urban Settlements Development Grant (USDG), with Nelson Mandela Bay accounting for the lion's share at R74.137 million. eThekwini returned R15.678 million, the City of Cape Town R13.451 million, and the City of Tshwane R2.6 million. A further R69.007 million was surrendered under the Metropolitan Informal Settlements Upgrading Partnership Grant, with Mangaung and Nelson Mandela Bay recording the highest figures at R34.111 million and R34.707 million respectively. Smaller sums were returned by the City of Tshwane and Buffalo City.
"Key initiatives, which include the quarterly performance review sessions for provincial, municipal and human settlements entities, allow these organisations to report on their performance and enhanced monitoring and early warning systems that help the department to identify underperformance early in the financial year and take timely action."
Stricter oversight and capacity support on the cards
Simelane explained that the department is now enforcing provisions within the Division of Revenue Act that permit the conditional allocation, withholding and reallocation of funds away from persistently underperforming provinces towards those demonstrating the capacity to spend effectively. Additional support measures include deploying built environment specialists and project management resources to struggling provinces and metros, alongside improved planning alignment to confirm procurement readiness, land availability and bulk infrastructure capacity before budgets are assigned.
Quarterly MinMec performance engagements between the Minister, MECs and accounting officers are also being leveraged to sharpen accountability for grant performance and ensure compliance obligations are met. The department has further convened rollover workshops with metropolitan municipalities, provincial treasuries and the South African Local Government Association to bolster credible applications to National Treasury.
"The department, together with provincial treasuries and other transferring officers, is part of the committee that assess rollover applications of the metropolitan municipalities, and the department plays a significant support role for the metros."
With housing delivery remaining one of the country's most pressing challenges, the government's intensified monitoring and enforcement regime signals a determined effort to ensure that every rand earmarked for human settlements reaches the communities it is intended to serve.
