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KZN town a model of cost-cutting success

Date: 11-11-2013

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Author: Rowan Philip, The Witness

Pietermaritzburg - Twenty municipalities in KwaZulu-Natal are under forensic investigation for mismanagement, and six more are so bad that the province has had to take over.

But one town - despite being surrounded by municipalities placed under administration - has emerged as a national model of cost-cutting success.

The ANC-controlled town of Newcastle not only has no debt - having borrowed nothing for three years - but its economy is booming at 10% growth and its government could survive for more than nine months if it didn't receive a cent in rates and taxes.

No free lunch

And it is the only town in KwaZulu-Natal where councillors and staff have elected to ban free lunches for themselves.

Following new budget guidelines last month that exposed over R1bn in wasteful entertainment perks for local governments nationally, it emerged that councils across KwaZulu-Natal enjoy catered meals of up to R20 000 per meeting at ratepayer expense.

Meanwhile, in a reply to opposition questions, KwaZulu-Natal local government MEC, Nomusa Dube, last week revealed that 11 municipalities have already been investigated for corruption or gross mismanagement - with the findings not made - while nine more were under active investigation.

Treasury found that millions more were spent by councils on everything from four-star hotel stays to photocopied binders of massive meeting agendas, and courier fees to send them to councillors.

But when The Witness visited a council meeting in Newcastle last week, councillors were found with their own lunch boxes or take-away meals in plastic bags. There was not a single photocopied page in sight.

Instead, all 61 councillors simply referred to agendas on their laptops or iPads.

Paperless

Mayor Afzul Rehman told The Witness that Newcastle was "the first paperless government - at any level - in South Africa; and one of only a few in the world. We saved R8m this year just by getting rid of paper agendas".

He said that - in a cost typical for other towns around KwaZulu-Natal - Newcastle ratepayers forked out R490 000 last year for catered meals and entertainment for their councillors. However, he said the cost to ratepayers since 1 June this year was "zero", following a decision in March to ban publicly-funded catering.

Instead, the 61 councillors and 30 management committee officials opted to chip in R100 from their salaries for each catered meeting scheduled, and to bring their own lunch boxes to additional meetings.

Rehman, 39, said the rest of the municipality had since followed suit: "It's the easiest thing to cut, and we as politicians have to set the tone. We said to our Executive Committee members: "If you are full time, then how you eat has nothing to do with the municipality."

Awards

Meanwhile, Newcastle has scooped a string of awards in recent months, including prizes for KwaZulu-Natal's best performing mayor; its greenest town; and the best shopping mall in South Africa, following a R500m investment in its new major retail centre.

The cuts to the entertainment budget were so sweeping that Rehman admitted he had only realised last week that his own reforms meant he had to pay for his tea and coffee at work as well.

Anton Bredell, the DA's shadow minister for local government, said DA-controlled councils in the Western Cape "have spent virtually nothing on catering since 2009".

However, when challenged to show a town that could rival Newcastle's zero budget, Bredell offered Overstrand, which has limited itself to "sandwiches and scones" - but still spent the small sum of R3 264 so far this year.

Thomas Hadebe, Newcastle caucus leader for the opposition Democratic Alliance, said some wasteful spending continued - including a sanctioned trip for councillors to the Salga Games in Kokstad next month.

But Hadebe said Newcastle out-performed other KwaZulu-Natal towns "because this mayor goes against normal ANC practice and does always listen to the initiatives of the opposition".

Telephone bills

Rehman singled out telephone bills as the next culprit to be axed.

He said cheap technologies like Skype and VOIP could save R2m in the coming year - and last month chided his own IT staff for racking up phone bills "in this day and age".

"This is unnecessary - especially for IT people!" said Rehman. "There's too much technology out there for us to be using telephones."

Vernon Mchunu, spokesperson for the provincial department of co-operative governance, said an audit was under way to identify which councils had been most effective in cutting costs.

"Newcastle may be the best, but we don't know that yet," said Mchunu.

He said the MEC "is on record encouraging municipalities to cut costs, including doing away with catering expenses".

George Mari, DA spokesperson for local government in KZN, said Newcastle was "an almost jarring stand-out", as, "otherwise, municipalities are collapsing all over KwaZulu-Natal - either under investigations; or interventions or qualified audits".

Source: http://www.news24.com/SouthAfrica/News/KZN-town-a-model-of-cost-cutting-success-20131111



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