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Cape Town - Provincial budgets will swell by R90bn over the next three years, Finance Minister Pravin Gordhan announced in Parliament.
But, Gordhan has warned that provinces have no option but to "cut the frills" and "change their approach" to how they spend money.
Tabling the provincial budgets and expenditure review in parliament, Gordhan said it was of great concern that substantial increases in provincial allocations over the past few years - R160bn in 2005/06 to a proposed R346bn in 2011/12 - had not translated into comparative improvements in the quality of services.
Gordhan said treasury would have to take a tough stance.
"Tough times require a tough look at where we spend scarce money and how we begin to feed money into new priorities," he said.
Provinces had been instructed to "re-align" their budgets to ensure money was redirected to core services.
For example, while the health departments had been spending significant amounts on consultants, they had been battling to pay for basics like blood bank bills. Their personnel expenditure also reflected what Gordhan believed was a skewed ratio between administration and clinical staff. In 2008, 261 000 people were employed by health departments in provinces, 100 000 of them admin staff.
"We have to get more people in the front line of delivery," he said.
'Less frills'
Gordhan stressed that by and large the provincial system of government was working.
It just had to be "modernised" to deliver value for money, especially in priority areas like health and education.
Another area of concern flagged was the lack of controls on "frills" expenses.
For example, provinces were spending about R260m a year on cell phone allowances.
Treasury's Kenneth Brown, who co-ordinated the expenditure review, said if the 3 000 senior managers who qualified were given a generous allowance of R1 000 a month, with the option to justify higher accounts, the total bill shouldn't exceed R36m a year.
"Tight controls are not there," said Brown.
- Fin24.com