SALGA welcomes release of withheld municipal funds to safeguard essential services

The South African Local Government Association (SALGA) has welcomed the announcement by the Minister of Finance that National Treasury will begin releasing the remaining withheld July 2026 Local Government Equitable Share transfers from 31 July 2026.

SALGA said the decision acknowledges that prolonged withholding of municipal funding could negatively affect the delivery of essential services, particularly those relied upon by poor and vulnerable households.

The association reiterated its longstanding position that while withholding transfers may encourage financial compliance, such measures must be carefully balanced against the constitutional obligation to ensure uninterrupted service delivery.

According to SALGA, municipalities already experiencing financial distress can face worsening cash-flow pressures when equitable share allocations are withheld, potentially affecting workers, service providers and communities that depend on municipal services. The organisation stressed that free basic services and indigent support should remain protected while municipalities implement corrective measures.

SALGA also reaffirmed its support for a differentiated approach that combines accountability with practical assistance. It called for municipality-specific assessments to identify the root causes of financial distress, supported by coordinated interventions from National Treasury, the Department of Cooperative Governance and Traditional Affairs (CoGTA), and provincial governments in line with Section 154 of the Constitution.

The association said this collaborative approach would better equip municipalities to address governance and financial management challenges while maintaining essential service delivery.

Looking ahead, SALGA urged continued cooperation between National Treasury, CoGTA and municipalities to strengthen revenue collection, funded budgeting, liquidity management, cash-flow planning and financial recovery initiatives.

The organisation concluded that lasting improvements in municipal financial health require a balance between accountability and support, reaffirming its commitment to working with all spheres of government to build financially resilient municipalities capable of delivering quality services while meeting their governance obligations.