Western Cape Premier Alan Winde and his cabinet will decide on Friday whether they will proceed with the intergovernmental dispute lodged against the National Treasury.

It comes after both the province and Treasury held high-level talks last year when the province lodged the dispute over massive budget cuts. 

Winde told News24: "After the declaration of the dispute, we had a meeting between the province and National Treasury and the Department of Cooperative Governance and Traditional Affairs, which is part of this process. We handed this over to our legal team, and there is currently a memorandum of agreement on how we proceed forward."

The premier added that the process is regulated and will be part of the update that he will receive on Friday. 

"We will then move to the next stage, which will be how we put our issues on the table and the legal arguments start," he added.

The impact of the budget cuts couldn't come at a worse time, as the provincial education department already indicated it would have to scrap plans to build 21 new schools this year.

With a roughly R716-million funding shortage, Western Cape pupils will have to go without eight new and replacement schools.

Winde said he wanted the process dealt with as quickly as possible.

"We have to plan because the R1.1-billion was taken away from us, and this means we've had to slow down on school builds, teacher appointments, and all of these things that offer services to our people," he said.

The decision to lodge the dispute stems from the centrally negotiated and agreed public sector wage bill, which was implemented after the Western Cape Parliament had approved its annual budget.

The province said the effect of the wage increase meant a hike in the Western Cape's wage bill of R2.9-billion, which it could not afford.

The National Treasury confirmed to News24 that it received a declaration of the intergovernmental dispute from the Western Cape government regarding the funding of the 2023 wage agreement.

Finance and Economic Opportunities MEC Mireille Wenger said at the time: "In the face of these in-year cuts, this government is taking the most decisive of action to protect our frontline services, our children, those who depend on the public health system, and the most vulnerable in our society."