City outlines its targeted pro-poor spending

As part of its commitment to being a Caring City that meets the needs of all citizens, the City of Cape Town has in place a pro-poor and redistributive budget for the 2012/2013 financial year.

This means that the City is committed to ensuring economic growth and development in order to create the jobs necessary to reduce poverty levels. The City therefore makes key investments in infrastructure and service provision for all citizens to create the necessary enabling environment.

South Africa and Cape Town have been left with the economic and spatial legacy of Apartheid. Therefore, the City is firmly committed to a policy of redress and redistribution which seeks to systematically turn around Apartheid-era under-investment in various parts of Cape Town.

Of the City's R18 billion budget that is focused on direct service delivery, R10,8 billion is spent on poor people. This means that 57,2% of the budget is spent on:

• targeted expenditure in previously disadvantaged areas;
• the provision of free basic services; and
• the provision of services and infrastructure in all informal settlements and formal poor areas.

Furthermore, every month approximately 1,9 million Capetonians benefit from the City's basket of free basic services, including a free allocation of water, electricity, sanitation and refuse removal.

The City spends the remainder of its budget on meeting fixed overhead costs such as staff costs and corporate infrastructure (e.g. vehicles); and on providing services and infrastructure in commercial, industrial and residential areas.

These investments benefit all Capetonians, as industries and commercial entities have a multiplier effect in that they help to create jobs that benefit individuals throughout the city. It is important to note that industries are also very resource-intensive. For example, a single factory in Atlantis uses two-thirds of the electricity consumed by the entire area.

Breakdown of the City's direct service delivery expenditure: 

***

Trend year-on-year

The City has increased its targeted spending on the poor every year, with a substantial upward trend over the past six years that far exceeds inflation. This is clear evidence of the City prioritising the needs of the poor and the vulnerable.

The City's Water and Sanitation Department has:

• More than doubled the number of toilets provided in informal settlements, from 14 591 in the 2006/7 financial year to 34 225 in the 2011/12 financial year
• Steadily increased the budget for the provision of sewerage infrastructure from R51 million in the 2006/7 financial year to R130 million in the 2011/12 financial year
• Substantially increased its spending on the provision of water in informal settlements - from R1,3 million in the 2006/7 financial year to R20,2 million in the 2011/12 financial year

Since the 2006/7 financial year, 19 899 new connections to the electricity network have been made.

Rebates

Over 276 000 formal households benefit from the following targeted social services packages: 

In addition, the City provides the following free services: 

Investment in informal settlements

The City provides free basic services to approximately 824 292 residents in informal settlements and to 1 173 000 residents in formal households. These services include the provision of water, sanitation services, and refuse removal.

In addition, the City has provided approximately 24 120 housing opportunities to beneficiaries from informal settlements, from the 2006/7 to 2010/11 financial years alone.

Targeted spending per specific Directorate

HEALTH

The City provides free basic health care to all residents - 85% of which is accessed by the poor and equates to 10 million patient visits per year. Of the R798 million total budget, R681 million is earmarked for targeted spending on the poor.

City clinics cater for the full range of primary health care services and are heavily used by residents without other forms of medical aid. These clinics, in partnership with the Provincial Health Department have led the country in reducing levels of HIV/Aids transmission in pregnant mothers and in dramatically increasing cure rates for TB.

The remainder of the Directorate's budget is spent on addressing environmental health issues, and is spent throughout the city in the interests of all citizens.

HUMAN SETTLEMENTS

The City's Human Settlements Directorate has allocated almost its entire budget (99,1%) to pro-poor spending, i.e. R1,449 billion of R1,461 billion.

This includes capital expenditure that is allocated for the following Departments:

• Existing Settlements
• New Settlements
• Housing land and forward planning
• Informal Settlements
• The Urban Renewal Programme

The areas receiving the highest portion of the aforementioned budget are: Khayelitsha, Mitchells Plain, Langa, Nyanga, Gugulethu, Macassar, Melton Rose, Scottsdene, Strand, Athlone, Heideveld, Hanover Park, Grassy Park, Parkwood, Retreat, Ocean View, Hout Bay, Adriaanse, Belhar, Leonsdale, Ravensmead, Wesfleur, Bishop Lavis, Bonteheuwel, Valhalla Park and Manenberg.

At present, the City is investing heavily in the upgrading of rental units throughout Cape Town. This focus will shift in the coming two years to the upgrade of hostels and surrounding areas, along with all other housing programmes such as the upgrading of informal settlements and the provision of subsidised housing.

UTILITY SERVICES

The City has earmarked a substantial portion of its budget to the provision of utility services for poorer areas, i.e.:

• Electricity Services dedicates 52,6%, i.e. R1,9 billion of the R3,6 billion total budget
• Water and Sanitation dedicates 44,3%, i.e. R1,7 billion of the R3,9 billion total budget
• Solid Waste Management dedicates 42,3%, i.e. R832 million of the R1,9 billion total budget

Investment in utilities is critical to improving the quality of life of poorer communities. To this end, the City has spent R679 million from 2006/7 to the present on providing improved service provision in these communities.

In this time period, the percentage of households with access to sanitation on a 1:5 ratio has increased from 47,1% to 88,2%.

Access to water through the provision of standpipes on a 1:25 ratio has ranged between 95% and 100%.

These improvements in service delivery have occurred despite the fact that during this time the number of households in informal settlements has increased by almost 50 000, from 154 761 to approximately 193 951.

TRANSPORT, ROADS AND STORMWATER

All of the major projects within the Transport, Roads and Stormwater Directorate focus on improving infrastructure in disadvantaged areas and ensuring that poorer communities have the means to access economic opportunities via affordable and safe public transport systems.

This is one of the key areas where the City's spending can make a substantial difference - not just to the lives of poorer citizens but to all Capetonians and visitors to the city.

• 64,8% of the IRT budget, i.e. R1,6 billion of the R2,5 billion total budget. This allocation is intended for the N2 express service from the Mitchells Plain and Khayelitsha areas; the Wetton/Lansdowne Corridor for the routes serving Wynberg, Ottery, Lansdowne, Hanover Park, Manenberg, Gugulethu, Nyanga, Cross Roads, Brown's Farm, Philippi and Weltevreden Valley; and Phase 1 servicing Dunoon, Table View, Joe Slovo, Atlantis, Melkbosstrand.
• 59,9% of the Transport budget, i.e. R213 million of the R356 million total budget, which entails construction and upgrading of public transport interchanges and installation of signage.
• 60,5% of the Roads and Stormwater budget, i.e. R770 million of the R1,2 billion total budget, which entails major road rehabilitation, non-motorised transport infrastructure, construction of new roads, minor road upgrades, and flood alleviation measures.
• Replacement/upgrading of Apartheid-era concrete roads.

COMMUNITY SERVICES

In the Community Services Directorate, the bulk of the City's budget goes towards ensuring the provision of parks, libraries, and sport and recreation facilities in poor areas.

• 34,4% of the City Parks budget, i.e. R174 million of the R508 million total budget. Funding from the parks budget is also directed at regional parks such as Wynberg Park, which provide recreational usage to citizens from across the city and are resource-intensive. This percentage also reflects historical under-investment in this area as a result of Apartheid-era spatial planning.
• 51,9 % of the Library and Information Services budget, i.e. R173 million of the R334 million total budget.
• 60,3% of the Sport, Recreation and Amenities budget, i.e. R389 million of the R646 million total budget.

SOCIAL DEVELOPMENT AND EARLY CHILDHOOD DEVELOPMENT

The City's Social Development and Early Childhood Development Directorate dedicates 84,1% of its budget to targeted spending on the poor. This equates to R58 million of the R69 million total budget and includes capital investment for additional Early Childhood Development Centres in Leonsdale, Rocklands, Ocean View, Delft, Strandfontein, and Golden Gate (Netreg/Bonteheuwel). There is further investment in poverty alleviation projects, combatting substance abuse and addressing homelessness.

The remaining budget provision is allocated to administrative costs, spending on projects in non-poor areas, and ward allocation projects in non-poor areas.

SAFETY AND SECURITY

The City's Safety and Security Directorate allocates 55,8% of its budget to targeted pro-poor spending,

i.e. R800 million of the R1,4 billion total budget. This is focused on specialised services, which work in the interests of the whole city, but are focused in disadvantaged areas and include:

• The Gang Unit;
• The Metals Theft Unit, commonly known as the Copperheads;
• Law Enforcement patrols;
• Disaster relief operations, including the provision of food parcels, fire response and fire prevention;
• Drug and liquor enforcement; and
• Neighbourhood safety officers

From the distribution of spending, there can be no doubt that the City of Cape Town, throughout its budget allocation, prioritises the needs of the poor - whilst at the same time ensuring that critical job-creating investments are made.

No other metro in South Africa has been able to achieve this critical balance in spending.

We are conscious that the needs in the city remain substantial, but the City of Cape Town is working tirelessly to redress the imbalances of the past.

Statement issued by Patricia de Lille, Executive Mayor of Cape Town, September 6 2012

Click here to sign up to receive our free daily headline email newsletter