2.7 The Equitable Share:Purpose and Allocations,FY 2003/04

Local Government Organization and Finance: South Africa 79

TABLE 2.7 The Equitable Share: Purpose and Allocations, FY 2003/04

Window as % Window of total equitable funding Funding purpose Factors in allocation share

S grant Fund operational Number ofpoor households 65.9 costs ofbasic and the relative difference services in poor between the number of households poor individuals and number ofnonpoor individuals; the costs ofan estimated basket ofbasic services per household I grant Fund institutional Overhead operating costs 7.1 and governance ofmunicipality in relation requirements to population size; declines as average municipal income increases Original 73.0 equitable share (S grant + I grant)

R293a Fund R293 staff Historical distribution of 6.0 transferred from R293s; decision about the provinces to number ofR293 staff municipalities allocated to the municipality (and conversely to the province) Nodal Fund projects Nodal areas—number 3.3 identified in the ofpoor people in nodes local ISRDP and URP planning exercises Free services Fund operational Average ofnumber ofpoor 13.0 costs ofsome key households and households services (excluding with basic services backlogs electricity provision to poor households) Fund operational Average ofnumber ofpoor 4.7 costs ofelectricity households and households provision to poor with basic electricity households backlogs

Source: National Treasury 2001, 2003b; Whelan 2003a, 2003b. a. Named after the number ofthe regulation that classified towns under control offormer Bantustan administrations. After apartheid, these towns were initially transferred to provincial administrations, but in the late 1990s, they were transferred to municipalities as a result ofa national decision.