Municipalities told to cut costs

MUNICIPALITIES across the country will now have their spending following cost containment regulations gazetted by National Treasury.

The new measures published last week aim to contain spending pertaining to travel, accommodation, catering and vehicle purchases among others in local government.

‘A well-managed municipality or entity should already have in place a cost containment policy as part of their budget-related policies, approved by the municipal council for the municipality or in the case of a municipal entity, by its board of directors.

‘The regulations merely require those municipalities or entities that do not have such a policy in place to do so, as a minimal measure to ensure good governance,’ Treasury said on Tuesday.

These regulations will come into effect on 1 July.

‘The threshold limit for vehicle purchases relating to official use by political office-bearers must not exceed R700 000 or 70% (VAT inclusive) of the total annual remuneration package for the different grades of municipalities.

In terms of travel, ‘an official or a political office bearer of a municipality or municipal entity must utilise the municipal fleet, where viable before incurring costs to hire vehicles.

‘They must make use of available public transport or a shuttle service if the cost of such a service is lower than the cost of hiring a vehicle, the cost of kilometres claimable by the official and the cost of parking.’

The municipal cost containment policy must also limit international travel to meetings or events that are considered critical.

‘Overnight accommodation may only be booked where the return trip exceeds 500 kilometres,’ Treasury said.

Municipalities will also not be allowed to incur expenses on alcoholic beverages unless it recovers the cost from the sale of such beverages.

These cost cutting measures have been welcomed by the City of uMhlathuze Municipality.

‘The City of uMhlathuze has long started to implement almost all the curtailment measures since it was still a draft and council adopted them.

‘Some of the new measures are to be included in our policies, such as international trips,’ said City communications Manager, Mdu Ncalane.

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