'cost-cutting plan working'
STRATEGIC cost cutting in several areas has helped reduce KwaZulu-Natal's projected over-expenditure from R5,6billion to R2,5billion in just six months, finance MEC Ina Cronjé said yesterday.
"It has been six months since these cost-cutting measures were implemented. By December 2009 the projected over-expenditure had declined from R5,6billion to R2,5billion," Cronjé said in Pietermaritzburg.
The reason for the projected over-expenditure was the funding shortfall in the implementation of the Occupation Specific Dispensation and the higher-than-budgeted-for wage agreement for public servants, she said.
"The shortfall for two expenditure areas in KwaZulu-Natal is some R1,1billion," Cronjé added.
The KwaZulu-Natal government announced in December 2009 that it would cut down on unnecessary overnight accommodation. Staff was instructed to sleep over only if the total distance to and from the destination is more than 500kilometres.
Spending on promotional items like T-shirts, caps and bags was also slashed. She said no performance bonuses would be paid from the 2010-11 financial year. According to Cronjé, 11 provincial departments are projecting to reduce their spending by more than the amounts indicated in the Provincial Recovery Plan (PRP).
"This indicates that the cabinet-approved cost-cutting measures appear to be having a positive effect on the spending levels of these departments. Two departments, the office of the premier and the royal household, are projecting to spend exactly in accordance with the PRP.
"The department of health is projecting a significant over-expenditure of R1,939billion (which is an improvement of R207million when compared to January's projected over-expenditure of R2,146billion)."
It is clear that this department still has challenges in containing its expenditure as a result of the OSD and the higher than budget wage agreement, but the trend is also positive," she said.