KZN cost-cutting plan pays off

THE KwaZulu-Natal government was yesterday singing its own praises that its cost-cutting strategy implemented in October last year has yielded positive results.

The provincial government introduced stringent cost-cutting measures of KwaZulu-Natal's cabinet-approved provincial recovery plan.

MEC for finance Ina Cronjé said that not only had the province drastically reduced its deficit for the 2009/10 financial year but it had even exceeded the set target.

"The targeted year-end over-expenditure was calculated not to exceed R1,7billion at the end of the financial year, after the province introduced stringent cost-cutting measures in September last year," Cronjé said.

At the time, the projected over-expenditure exceeded a whopping R5billion.

"However, the province's cost-cutting measures were even more effective than anticipated initially, ending the financial year with a net deficit of R1692billion - some R8million less than we had hoped for."

She said the cabinet instructed all departments to ensure that legitimate service delivery should not be compromised as a result of the implementation of these cost-cutting measures.

Cronjé said by last December the initially projected over-expenditure of R5,6billion (before the recovery plan had been instituted) had declined to R2559billion.

This, she said, indicated that the province was making good progress in achieving its goal.

By the end of March this year, provincial departments had overspent the provincial budget allocation by R1902billion.

Fourteen departments reduced their spending by more than the amounts indicated in the plan.

The department of health had pledged to cut back their spending by R600million as part of the plan.

This, if achieved, would have resulted in a year-end over-expenditure of R1730billion, but instead the department ended the year with a net over-expenditure of R2105billion, which is R375million more than the agreed-to amount.

The department of education targeted a cutback of R958million, which would have resulted in a year-end under-expenditure of R309million.

Instead, the department ended the financial year with an over-expenditure of R172million.

Cronjé said the over-expenditure in health was due to laboratory services costs as well as medical supplies. Added to this were costs related to the roll-out of ARVs and HIV-Aids testing costs.