Newcastle Municipality has confirmed that the National Treasury has issued instructions for the release of its equitable share allocation, following a recent council resolution to pursue legal action.

The municipality had given Treasury until Friday, December 12, to confirm the transfer, failing which it would approach the High Court.

In correspondence dated December 12, the National Treasury confirmed that instructions to release the funds had been issued, with the relevant division mandated to coordinate the transfer with the Department of Cooperative Governance and Traditional Affairs (CoGTA).

The funds are expected to reflect in the municipality’s bank account within four working days, by close of business on December 18.

The municipality said the confirmation brings finality to the matter and ensures the continuation of basic services without interruption.

The equitable share funding is an unconditional baseline allocation for general municipal operations and basic services.

Commenting on the development, Newcastle mayor Cllr Xolani Dube said the confirmation was a victory for residents.

“This confirmation by the National Treasury is a clear victory for the people of Newcastle. The municipality remains stable, governed and fully capable of delivering services,” Dube said.

Municipal manager Zamani Mcineka said the municipality had remained compliant and operational throughout the process.

“The confirmation affirms the strength of our administration and financial management systems. We remain committed to uninterrupted service delivery,” he said.

The municipality added that the ‘equitable share is a constitutional mechanism intended to protect service delivery, particularly to vulnerable communities, and said it would continue engaging other spheres of government while focusing on service delivery and financial discipline.’

“The municipality will not allow speculative commentary, distortion, or malicious narratives to undermine public confidence, erode trust in government, or compromise cooperative governance. Newcastle Municipality does not govern through media speculation, nor does it respond to sensationalism. It governs through law, policy, accountable leadership, and constitutionally mandated processes, in service of the people of Newcastle.”

SALGA raises concerns over withheld equitable share

The South African Local Government Association (SALGA) said in a statement that the withholding of the equitable share had affected 75 municipalities nationwide.

Since September, the Treasury issued two circulars indicating its intention to invoke Section 216(2) of the Constitution and Section 38 of the Municipal Finance Management Act, allowing for the withdrawal of the equitable share used to support essential municipal functions.

SALGA said it made several attempts to engage Treasury ahead of the December tranche payment in an effort to prevent the withholding and to assist municipalities to comply with legislative requirements.

However, SALGA said Treasury failed to cooperate, limiting the association’s ability to help municipalities address compliance issues before funds were withheld.

According to SALGA, the process followed by Treasury was ‘flawed, with inconsistent and unclear communication to affected municipalities. In many cases, it was not made clear what information or documentation was required to remedy non-compliance, while deadlines were poorly communicated.’

SALGA added that some municipalities submitted responses to Treasury but received no feedback until the equitable share was withheld.

The association has called on the Treasury to immediately release the LGES tranche to municipalities that have complied with the requirements.

SALGA also urged Treasury to introduce a clear, transparent and time-bound process for withholding equitable share allocations through the Division of Revenue Bill, and to strengthen engagement through Intergovernmental Relations platforms.

In addition, SALGA called for the consistent application of the law across all spheres of government, including against departments and entities that owe municipalities or fail to comply with unauthorised, irregular, fruitless and wasteful expenditure regulations.

SALGA said it would continue engaging Treasury to secure the release of outstanding funds and to protect service delivery at local government level.

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