Joburg's finance MMC cautions against hasty insourcing decisions

New Johannesburg Finance MMC Loyiso Masuku has warned the country’s largest municipality against insourcing contracted staff without conducting due diligence, resulting in millions of rand in overspending on salaries.

At a council meeting on Tuesday, Masuku said they have looked at the issue of overspending and the city’s salary bill.

“Our problem still remains the insourcing that was done, and we cannot speak about it. It remains insourcing that was done because we had not budgeted for it. That is why we will have that particular … but the staff is here, they have to be paid, and they are doing the work,” she said.

According to Masuku, this means the municipality will always have this problem of over expenditure on its salaries because it had not properly planned and budgeted for that particular item of insourcing at the time.

After the DA wrestled the City of Johannesburg after the 2016 local government elections under then mayor Herman Mashaba with the help of the EFF, several contract staff, including security guards, were directly employed by the municipality.

But Masuku, without naming both parties, said the lesson is that councillors must always do due diligence and not take decisions that will have an impact on the salary bill going forward.

“But that’s in the past, it’s important to explain why we will have over expenditure on the salaries because councillors continue to raise the matter, rightfully so,” she said.

Freedom Front Plus councillor Cornelis Boer said the R588 million overspending on employee costs would be recorded as irregular expenditure because it is overspending on a budget item.

“The city’s financial figures are really concerning, and we really need to improve them,” he said.

Masuku’s comments follow the EFF tabling the Insourcing Bill before the National Assembly to insource certain services that are required regularly by organs of state, including security, cleaning and gardening services, general maintenance, which includes repairs to buildings and refurbishment of infrastructure, information technology, catering, auditing, administration, transport, and healthcare-related services.

Trade union federation Cosatu has described insourcing as a cry for thousands of workers who have seen their labour rights undermined and conditions of service deteriorate as they have been outsourced across the state over many years.

It said outsourcing has become a key ingredient of state capture and corruption across the state, with incestuous collaboration by corrupt elements in both the public and private sectors.

“It has not only weakened state capacity to deliver the public and municipal services that working class communities and the economy depend upon, but it has bled the state of scarce resources needed to fund hospitals, schools, policing, among other frontline services,” stated Cosatu.

loyiso.sidimba@inl.co.za