Council has approved the City of Cape Town’s ‘help and save’ budget for the 2021/22 financial year, including a R3,4 billion allocation to help qualifying residents with rates and services relief. The City continues to protect its residents and ratepayers as much as possible from rising costs, especially from Eskom’s massive price increase of 15,06%. Extensive budget cuts have been made.
Highlights
• R1,4 billion for property rates relief.
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• R2 billion for indigent relief.
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• R8,3 billion strong capital budget to help boost local economic recovery to improve lives and livelihoods.
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• R460 million savings in staffing and contracting services costs and again, no performance bonuses for senior staff (task grade 14 and above) and management.
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• No provision for wage increases
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• More than R313 million specifically on Covid-19-related spend (operating budget).
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‘The Covid-19 crisis, Eskom’s steep electricity increase of 15,06%, a very slow economic recovery and the general state of the national economy, are some of the biggest factors impacting the City’s R56,6 billion budget. The City must make the hard choices around how to deliver on the outcomes of the Integrated Development Plan within the boundaries of a budget that is severely constrained by these factors.
‘The City has kept rates and service charges to the bare minimum required to cover the cost of service provision to assist already struggling residents, communities and businesses. However, there are some pressures that are very much outside of our control, like the impact of the Eskom price increase. The City’s electricity tariff will therefore increase with 13,5% from 1 July 2021. The City has done its utmost to absorb these increases, however, over the years, we have already made our energy operations very efficient, so there is not too much room to manoeuvre. Unfortunately, the City cannot wholly absorb such high increases, bearing in mind that 65% of the City’s tariff income is used to buy bulk power from Eskom. Customers should bear in mind that come July, they may experience a hike in their electricity bills, given the combination of higher usage in winter, more people at home for more of the time as many still work remotely or are impacted by lockdown conditions, and the Eskom-driven tariff increases. These factors should be considered in household budgeting. The City is here to help and we encourage residents to make use of the rates and services relief the City has on offer,’ said the City’s Mayoral Committee Member for Finance, Alderman Ian Neilson.
Strategic financial approach informing the Budget
The approach has been to keep revenue parameters as low as possible to assist already struggling communities and businesses. In doing so, the focus fell on reducing expenditure, while at the same time ensuring that service delivery is not compromised.
The key focus areas over the coming year as part of the City’s Strategic Management Framework are:
• The pandemic response
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• Prioritising essential services
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• Prioritising financial sustainability
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• Enabling economic recovery
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• Responding to land and housing crises
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• Prioritising safety
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• Responding to health and social impacts
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• Organisational stabilisation, adaptation and resilience building
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Source: City Of Cape Town