South Africa

RADICAL COST-CUTTING

Eastern Cape warns of drastic budget-slashing to meet national government targets

Eastern Cape warns of drastic budget-slashing to meet national government targets
Eastern Cape Premier Oscar Mabuyane. (Photo: Gallo Images / Die Burger / Lulama Zenzile)

Some health services in the Eastern Cape could be eliminated, while state patients might have to start buying their drugs. Education, too, is likely to be badly affected, Eastern Cape Premier Oscar Mabuyane has warned.

Conditions at state hospitals, clinics, schools and even on roads are likely to worsen significantly if the Eastern Cape government introduces cost-cutting measures as proposed by the national government. This is what Premier Oscar Mabuyane and his provincial executive committee are busy discussing.

Mabuyane has indicated that revised provincial guidelines on cost containment measures had been developed based on national guidelines and warned residents to brace for significant negative impacts as mandatory cost-cutting hits the province.

“The guidelines were presented in the provincial management meeting chaired by the director-general and attended by the heads of the provincial departments. The guidelines were also circulated to the accounting officers of all the provincial departments and public entities,” Mabuyane said.

Health 

Mabuyane has conceded that state patients will have reduced access to healthcare: “Patients may have to wait longer for appointments and procedures, and some services may be reduced or eliminated altogether,” he said. 

But while services are likely to be reduced, the freezing of posts will at the same time lead to an increased workload for healthcare workers. Mabuyane said this would mean longer hours and an increase in healthcare workers’ patient loads.

“This could lead to burnout and decreased quality of care,” he warned. “The freezing of posts could make it difficult to attract and retain healthcare workers, which could further exacerbate the shortage. Patients may have to pay more for out-of-pocket healthcare costs such as prescription drugs and co-pays.”

This is considerably more detailed than the answers provided by the Eastern Cape Department of Health.

Spokesperson Sizwe Kupelo said there will be cuts to some of the conditional grants.

“At this stage, the impact is likely to be on the health facilities’ revitalisation grant and the district health programme grant. The department will endeavour to minimise the impact on patient care by trying to reprioritise from within available budgets.”

He said they were awaiting the tabling of the mid-term budget by finance MEC Mlungisi Mvoko.

Education

Mabuyane further warned that larger class sizes will be inevitable in the next school year. 

“Teachers may have to teach more students, which could make it difficult to provide individualised attention to students. Schools may have to cut back on programmes and resources, such as extracurricular activities and supplies. 

“Teachers may have to work longer hours and take on more responsibilities, which could lead to burnout and decreased quality of education.

“The freezing of posts could make it difficult to attract and retain teachers, which could further exacerbate the shortage. Some students may not be able to afford to attend school if tuition fees are increased or if financial aid is reduced.”

Roads and transport

“Roads may deteriorate and become more dangerous, and new road projects may be delayed or cancelled… Public transportation services may be reduced or eliminated altogether, making it more difficult for people to get around. 

“The reduction in road maintenance and construction could have a negative impact on the economy by reducing job creation and economic growth.”

But while Mabuyane warned about what could happen, a memorandum from the provincial treasury was explicit about what had to happen.

“Accounting officers and accounting authorities are required to implement control measures to ensure that all expenditure in their respective institutions is necessary, appropriate, cost-effective and is recorded and reported as prescribed by the relevant legislative framework.

“The August letter (from the National Treasury) summarises the key elements of the fiscal challenges faced by the government in the current financial year. It further advises accounting officers and accounting authorities on specific measures required to achieve the required savings and prevent the materialisation of potentially crippling resource constraints in the latter part of the 2023/24 financial year,” said the memo.

No more consultants

“Consultants must not be hired to perform the administrative support functions, and the following are stated as examples: Human Resources, Strategy and Operational Management (unless this is related to research work, for which universities and similar institutions should be engaged at negotiated rates), Financial Management, Supply Chain Management, and Financial Information Systems… 

“Where it is unavoidable, departments and public entities must obtain Provincial Treasury approval to appoint consultants.”

Cellphones

“Cellphone expenditure: Accounting officers and accounting authorities must allocate cellphones by considering the job requirements of the post occupied by such officials, and impose limits. The use of landlines must be limited to a prescribed amount per month.”

Branded clothing or goods and gifts

“Expenditure on corporate branded items of clothing or goods for personal use of employees must not be incurred. Public entities may only grant gifts, donations and sponsorships from the annual allocation or other movable property with the approval of the relevant Executive Authority and such gifts, donations and sponsorships must be reported to Provincial Treasury within 14 days of the approval by the Executive Authority.”

Read the full National Treasury guidelines here:

Read the full provincial treasury guidelines here:

DA response

The Democratic Alliance’s Bobby Stevenson said, “The reason we find ourselves in this predicament is because the ANC’s ideology keeps us locked into a climate of poverty, poor economic growth and rising national debt.

“These cutbacks come at a time when we are grappling with significant challenges in our province, and while fiscal responsibility is crucial, we must consider the detrimental effects these measures will have on service delivery.”

He said the salaries of the “millionaire managers” in Bhisho should be frozen instead.

“Rather than prioritise funding to deal with the stubbornly high unemployment crisis, a failed health department or the collapsing local municipalities, the ANC-led government has once again allowed runaway salary costs to consume the bulk of its spending.

“It’s still deployed cadres first and everyone else last. 

“Overall, the austerity measures being implemented will significantly hamper service delivery in an already crippled provincial economy. The DA calls on the provincial government to carefully reconsider these measures, prioritise the welfare of our citizens and embrace responsible and effective alternatives,” he added.

Read more in Daily Maverick: Service delivery collapse: ‘Gatvol’ Eastern Cape resident reports provincial-wide failures

The instruction to cut costs comes as several MECs and heads of department are due to report to the Public Protector on how they intend to improve service delivery in the province. DM

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