Cost-cutting pays-off for KZN

Durban - The KwaZulu-Natal government on Tuesday said its cost-cutting measures had paid handsome dividends by reducing the province’s projected over-expenditure from R5bn to R1.698bn.

"Cost-cutting measures were even more effective than anticipated initially, ending the financial year with a net deficit of R1.692bn, some R8m less than we had hoped for," said finance MEC Ina Cronje.

The KwaZulu-Natal legislature approved the strict cost-cutting measures in September last year after it was discovered that the province would have a deficit.

Cronje said midway through the 2009/10 financial year the picture was depressing, with projections indicating that the province was heading for an over-expenditure of R5.6bn.

Cost-cutting measures included the freezing of all nonessential vacant posts, rationalising overseas trips, stopping catering for meetings and cutting down on unnecessary overnight accommodation.

Cronje said 14 departments had reduced their spending by more than the amounts indicated in the provincial recovery plan.

"Only the departments of health and education did not fully meet their targeted cut-backs," she said.

The department of health had pledged to cut its spending by R600m.

"This, if achieved, would have resulted in a year-end over-expenditure of R1.730bn. Instead, the department ended the year with a net over-expenditure of R2.105bn, which is R375m more than the agreed to amount," she said.

Cronje said the department of education had pledged to cut-back its spending by R958m, which would have resulted in a year-end under-expenditure of R309m.

"Instead, the department ended the financial year with an over-expenditure of R172m. These spending levels are R481m higher than the cabinet-approved recovery."