Polokwane Municipality Cuts Costs by Ending Consultancy ContractPolokwane Municipality Cuts Costs by Ending Consultancy Contract In response to calls from the Accountant-General (AG) and South African Local Government Association (Salga) to reduce reliance on consultants, Polokwane Municipality has severed ties with Minatlou Future Fleet Management Services. This move is expected to save the municipality R1 million annually. Ending a Costly Contract The municipality had a six-year contract with Minatlou to provide a municipal fleet of vehicles and supply fuel. The fuel alone cost the municipality R48 million per year. The new mayor, John Mpe, said the termination of the contract would allow the municipality to regain control over its fleet management system and improve accountability. Limpopo’s High Consultancy Spending Limpopo is the third highest spender on consultants in South Africa, allocating over R1.13 billion. In the 2019-2020 and 2020-21 financial years, the province’s 27 and 25 municipalities spent R249 million and R263 million on consultants, respectively. Measures to Reduce Expenditure The AG’s report identified irregular expenditure of R1.68 billion by five municipalities in Limpopo. The municipalities also incurred unauthorized expenditure of R2.57 billion and useless and wasteful expenditure of R160 million. Polokwane Municipality’s decision to end its consultancy contract is seen as a step towards reducing these expenditures. Conclusion Polokwane Municipality’s move reflects a growing recognition among municipalities that reliance on consultants can drive up costs and divert funds from essential services. The ending of the consultancy contract is expected to improve accountability and allow the municipality to prioritize services for its residents.
A Limpopo municipality has heeded Accountant-General (AG) Tsakani Maluleke’s call to minimize the use of consultants in a bid to cut costs and intensify services.
Polokwane Municipality, the richest with an annual budget of more than R6 billion, last month severed ties with Minatlou Future Fleet Management Services in a bid to save money to improve services to its almost one million residents.
The company had a six-year contract with the municipality to provide a municipal fleet of vehicles through Standard Bank.
Costs R48 million annually
The service included the supply of fuel for the fleet, which costs the municipality R48 million annually, Saturday burger was told.
Now, after the appointment of the new mayor, John Mpe, the municipality said it could save R1 million every year.
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Mpe, who wears three hats: Polokwane Municipality Mayor, ANC regional chairperson Peter Mokaba and South African Local Government Association (Salga) chairperson in Limpopo, said the move was in response to the call from the Attorney General and Salga.
They advise municipal authorities to cut out middlemen so that municipal funds can be saved and community services can be improved.
In the 2019-2020 financial year, 27 municipal councils in Limpopo spent a total of R249 million on consultants.
The following financial year (2020-21), the province’s 25 municipalities spent R263 million on consultants.
“By moving to a direct agreement with Standard Bank, we have not only reduced costs but also gained greater control over our fleet management system.
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“This new scheme will ensure better monitoring of fuel consumption, preventing misuse and ensuring greater accountability,” said Mpe.
Limpopo is the third largest spender on consultants
Limpopo is the third province that spends the most money on consultants, after KwaZulu-Natal and the North West Province.
According to the AG’s report of May 31, 2023, the province has spent more than R1.13 billion on consultants.
Five municipalities in the province were identified as the main culprits for the irregular expenditure of R1.68 billion.
These were the district municipalities of Mopani and Vhembe and the local municipalities of Polokwane, Mokgalakwena and Maruleng.
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According to the Attorney General’s report, municipalities in the province incurred R2.57 billion in unauthorized expenditure and R160 million in useless and wasteful expenditure.
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