No, no, no! Last year’s Eastern Cape expenditure patterns cannot be repeated. The danger lights are flashing once more. The first quarter provincial budgets and expenditure report released by National Treasury on 16 August is a siren call to the provincial government. Unless drastic action is taken to turn the situation around the Eastern Cape will once again remain locked into poor patterns of capital expenditure, particularly so in the Department of Education. The provincial government will once again overspend on personnel in education and health. This has drastic consequences for our province when it comes to improving the lives of the poor.
What will it take to shake the provincial government out of its state of slumber and denial when it comes to correcting our financial management?
Over expenditure in these departments result in funds being taken from other departments. This limits the Eastern Cape’s capacity to deliver services and promote the province to attract investment.
Drastic action needs to be taken against officials responsible for poor management.
Altogether the Eastern Cape has only spent R594 million out of a total capital budget of R3, 753 billion, which amounts to 15, 8% which is among the lowest. On the other hand, its expenditure on personnel is amongst the highest at 24, 7 %.
This imbalance occurred last year where the province overspent by R500 million on personnel and under spent on capital works by R1, 4 billion. We cannot afford to pay people more and more to deliver less and less.
Education, which has spent a total of 25, 7%of its main budget (R24, 63 billion) has only spent 8, 5% of its capital budget (R 106 million out of R1, 254 billon) — the lowest of all the provinces. This gross under expenditure on capital works compares against a provincial average for all provinces of 23, 9%. These figures also indicate that we will overspend on personnel in the current financial year.
In the last financial year education only spent 33% of its capital budget.
Infighting as to who is in charge of education is crippling the department. Clearly the intervention team has not made a difference when it comes to capital expenditure.
The expenditure patterns in health are also of concern. Although its expenditure is the highest among the provinces (24, 7% at R3, 5 billion) it is a decrease of 5, 5% compared to last year. This means the health department does not have the funds to provide the same level of service. It will also overspend on personnel.
When it comes to housing the province has only spent 13, 7% of its budget or R299 million out of R2, 177 billion. This is the lowest of all the provinces.
The expenditure on roads was not released but I have asked a question for oral reply on this.
The Democratic Alliance believes that the Provincial Treasury needs to tighten its grip on the provinces’ finances at this early stage so last year’s disastrous expenditure patterns are not repeated. The DA will raise its concerns in the next Finance Portfolio Committee meeting in Bhisho to ensure the necessary plans are put firmly in place.
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