Underspending Must Not Be Allowed To Cripple Delivery

Andrew Louw, MPL

DA Northern Cape: Provincial Leader

The Democratic Alliance is calling for urgent measures to be put in place to ensure that the high levels of underspending by Northern Cape departments in the previous financial year are not duplicated in the current financial year. This is in response to a recent report to Parliament’s Select Committee on Finance that highlights the fact that Northern Cape departments underspent by millions in the previous financial year.

Underspending in the Health, as well as Roads and Public Works departments, were some instances of underspending that were highlighted in the report. The fact of the matter, however, is that the health system is in a state of chaos and our roads are falling apart. In other words, every available cent should be spent on improving provincial services.

The DA believes that underspending is reflective of department’s poor capacity to fulfill their mandates. This, as a lack of timeous spending means that some citizens will not receive essential government services. In addition to their service delivery function, certain areas of spending have important economic effects – for instance jobs are created through the activity of providing infrastructure. Underspending also frequently blocks resources from other departments which are spending more successfully, depriving them of the means to expand their delivery. Moreover, underspending in one year often leads to rollovers and other adjustments in the following year. These, in turn, are difficult to plan for, leaving departments unprepared to spend the additional resources. Underspending is thus often difficult to contain and promotes a vicious cycle of inefficient spending.

Good government in democratic societies is about responsible and effective management of the public’s resources for the public’s use. Efficient financial management is crucial for collecting revenue and spending money effectively. It is about exercising a custodial role over the money that is intended to help people and ultimately it is about serving the people. In the same vein, it is not about withholding services due to an inability to spend the budget.

The Democratic Alliance in the Northern Cape will do our utmost to monitor underspending through parliamentary questions and during portfolio committee meetings with respective departments.

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