Deputy Speaker, provinces and municipalities are assigned key service delivery functions such as school education, health, social development, housing, roads and the provision of electricity, water and municipal infrastructure. That we all know. We are also aware of the provincial equitable share formula that was reviewed last year, and we notice that a new health component has been introduced in this Bill, which the ACDP supports.
A review of the local government equitable share is also under way, with a new formula expected to be introduced only after the data from this year's census is made available. We also see that a series of municipal boundary changes comes into effect in May. This will impact the equitable share, so there will be some changes in the equitable share.
However, the ACDP's main concern lies with project management capacity. We know departments overspend on current expenditure, such as salaries, as Mr Oriani-Ambrosini pointed out. However, underspending of capital budgets is evident at various levels, particularly at provincial and municipal levels. We also notice that, for the 2009-2010 financial year, government failed to spend R12,4 billion budgeted for capital expenditure, and that, I am sure, is a cause for concern for all of us.
As for municipalities, they struggled to spend their capital allocations. They also found it difficult to collect their revenues, with aggregated municipal consumer debts amounting to R62 billion.
The Finance and Fiscal Commission recommended that government adopt standard indicators or early warning systems to measure and detect municipalities facing fiscal stress. Improving municipalities' management of their own revenues will yield substantially greater returns than those given through the equitable share that I referred to earlier, but not along the lines of the billing chaos that we see in Johannesburg.
The ADCP particularly supports capacity-building grants aimed at building management, planning, technical, budget and financial management skills, as contained in this Bill. We also welcome the changes to the conditional grant framework for provinces and municipalities in an attempt to address the persistent capital backlogs.
We trust that the Infrastructure Development Improvement Programme will ensure that government builds capacity in provincial treasuries and the Departments of Health, Education, and Public Works, to smooth out the roll- out of capital projects. This is long overdue, as the shortage of engineers and project managers at local and provincial levels has meant that government has had great difficulty in finalising these capital projects. Hopefully, we have learnt from the Fifa Soccer World Cup experience on how to complete massive capital projects on time and within budget.
We, as parliamentarians, must ensure that all spheres of government have the capacity to spend the vast monies allocated for capital projects, and that rollovers for capital underexpenditure do not occur again. The ACDP will support this Bill. I thank you.