Plans to End Housing Underspending Afoot

A total of R8.801-million has been returned at the provincial level from the Human Settlements Development Grant and the Informal Settlements Upgrading Partnership Grant.

Despite a waiting list of millions of families, the government returned significant portions of unspent human settlements grants to the National Treasury during the 2024/25 fiscal year.

To address this crisis, the Department of Human Settlements is implementing a radical overhaul of project planning to ensure that allocated funds are actually used to build homes. The failure to spend these grants has devastating consequences for community development, leading to stalled service delivery and a loss of economic growth.

Minister of Human Settlements, Thembi Simelane, noted that the new interventions aim to ensure that money leads directly to serviced sites, housing units, and bulk infrastructure. “A total of R8.801-million has been returned at provincial level from the Human Settlements Development Grant and the Informal Settlements Upgrading Partnership Grant,” Simelane reported to the NCOP.

Gauteng recorded the highest underspending, followed by Mpumalanga and Limpopo, while municipalities returned a much larger combined sum of over R174-million. In the metropolitan areas, Nelson Mandela Bay and eThekwini were among the largest contributors to the unspent funds.

Simelane explained that the department has now introduced quarterly performance reviews and early warning systems to catch underperformance before the financial year ends. “Key initiatives, which include the quarterly performance review sessions for provincial, municipal and human settlements entities, allow these organisations to report on their performance.”

These sessions are designed to identify bottlenecks in the value chain and take timely action to prevent the loss of funds. The department is also enforcing the Division of Revenue Act, which allows the government to take money away from underperforming provinces and give it to those with the capacity to spend.

This withholding and reallocation strategy ensures that the national housing budget is not wasted due to local administrative failures. Additional support includes the deployment of technical specialists and project management teams to struggling municipalities. This assistance focuses on ensuring that land availability and procurement processes are ready before any funds are officially allocated to a project.

“These initiatives aim to ensure that allocated funds lead to the delivery of serviced sites, housing units, and bulk infrastructure while minimising underspending across all levels of government,” Simelane concluded.