Chairperson, hon members of this House, firstly, let me take this opportunity to thank all members for their valuable inputs in taking forward the process of the Division of Revenue Bill, which is an important part of our Budget process. As it has been indicated by a number of members and in terms of our Constitution, government ensures a transparent and equitable system in dividing the nationally-raised revenue between the three spheres of government.
This tabling of the Division of Revenue Bill and its underlying allocations is the outcome of extensive consultation between all spheres of government. The NCOP will continue with this process in the weeks to come as per its mandate. The lively debate one has seen here today will be seen continuing and it is the strength of this organisation that out of this debate come the products that will continue to make the lives of fellow South Africans better.
The proposed Medium-Term Expenditure Framework, MTEF, has been structured to enable government's policy priorities to be implemented in accordance with delivery agreements that Ministers have signed with the President. The Division of Revenue Bill, which sets out the three-year allocations for the equitable shares and conditional grants for the provinces and local government, will enable government to intensify its activities that will make a difference to the lives and prospects of all South Africans.
This is the second time that the Division of Revenue Bill is processed in terms of the Money Bills Amendment Procedure and Related Matters Act, Act 9 of 2009. I am glad to report that substantial progress has been made in implementing the recommendations made by the Standing and Select committees on Appropriations when they commented on the 2010 Division of Revenue Bill and 2010 Medium-Term Budget Policy Statement, MTBPS.
Firstly, the Standing Committee on Appropriations recommended that the provinces should come up with detailed savings plans and promote value for money in their spending, and a lot of members alluded to this important element of our Budget process. Through implementing austerity measures and recovery plans, provinces were able to secure savings amounting to R13,3 billion during the 2010 MTEF.
Secondly, the committee recommended that, as government terminates grants for backlogs in electricity, water and sanitation at clinics and schools, sufficient funding should be provided to address the remaining backlogs. A grant-in-aid in order to address this, amounting to R8,2 billion over the 2011 MTEF, will enable the national Department of Basic Education, in consultation with provinces, to fast-track the eradication of unsafe school structures and eradicate water, sanitation and electricity backlogs at schools over a three-year period.
Thirdly, the committee also recommended that the national Department of Higher Education and Training should establish at least one university in Mpumalanga and Northern Cape provinces before the end of the 2009 to 2014 government term. An amount of R300 million has been made available over the MTEF for the establishment of these two universities. The Department of Higher Education and Training will be responsible for building these facilities. This reaffirms our commitment, as the ANC government, to access to education for all.
Fourthly, concerns were raised during last year's deliberations on the Division of Revenue Bill on the section dealing with authorisation of expenditure, particularly virements and disaster funding. This section has been removed and the funding of immediate costs spanning a period of three months and related to disasters will now be funded through a new conditional grant, and the release of such funding will be expedited.
A number of members made some important points that might require some kind of response. The chairperson of the Standing Committee on Appropriations, Mr Sogoni, spoke about the local government equitable share formula and the inability of some municipalities to be viable. The formula, as you would note, has been adjusted to benefit poorly resourced municipalities. All municipalities, including those that are largely reliant on transfer, should also optimise their own revenues and a number of members made mention of that point.
We would like to sincerely encourage ... Mr Groenewald actually went to the extent of saying we should not allocate funds to those municipalities. I don't think that would be responsible.
As far as we are concerned, we need to support those municipalities. We need to come up with monitoring mechanisms of making sure that those municipalities are supported. That is why there is now a capacity-building grant that has also been allocated in order to assist municipalities to be able to spend so that our people are able to access service delivery.
The chairperson also referred to the racial divide in large urban towns. The grant system has also been enhanced. For metros it has been amended so that they can take greater ownership of service delivery and spatial patterns - particularly housing, public transport and municipal services - so that these can be planned and funded in a more integrated manner.