Insourcing security sees costs climb

A council decision to insource 460 security guards – meant to save the Nelson Mandela Bay municipality money – has backfired and is instead costing millions of rand more.

This, as the city is still using private security to guard some of its assets because the 460 watchmen are not enough to meet the protection demands of the municipality.

It needs at least 212 additional security staff – 140 watchmen and 72 support staff – to be able to meet all the demands, but this would come at an added cost of R48.7m a year, money the municipality does not have.

Its budget and treasury department said the only way it could raise the money needed to insource more security staff would be to increase property rates by 2.5%.

This was rejected on Tuesday by councillors serving on the corporate services portfolio committee, who said the bean counters had to come up with more creative ways of finding the money.

In the meantime, the municipality is incurring unauthorised expenditure due to its continued use of private security firms.

In November, the council took a decision to absorb about 460 security guards who were employed by private firms contracted to the city – to save the metro money.

In a report to the portfolio committee, corporate services acting executive director Nosipho Xhego said increasing the size of the guard force was expected to save the municipality money in the long run.

“The reduction of [costs] will only be realised by council on a long-term basis where the safety of its assets would no longer be vulnerably exposed and compromised, but protected at a reduced cost due to the appointment of the watchmen.

“The current number of appointed watchmen is insufficient to take over all permanent sites being guarded,” Xhego said.

She said while the 460 security staff – previously employed by private firms – were absorbed, no added provisions were made for staff to manage them and all the extra administration that is now required.

In her report, the budget and treasury department said it had budgeted R78m to insource the 460 watchmen, but that it was set to cost about R81m for the year.

“It must further be noted the budget incorporated into the 2018/19 [medium term] for the 460 absorbed watchmen excluded tools of trade, for example uniform and radios.

“Budget and treasury must indicate that while 460 watchmen were absorbed in the employ of NMBM in the 2018/19 financial year, the continuous utilisation of private security without a budget within the safety and security directorate has not ended, meaning there may be unauthorised expenditure . . . incurred.”

DA councillor Rene Meyer said while the party agreed in principle that the municipality needed the additional positions, there was a more pressing need for a management structure.

“If we had to insource, we would have to increase rates and taxes by 2.5%. That is of great concern to us.

“We must look at the possibility of us phasing in the management structure and the rest when there is budget available,” Meyer said.

DA councillor Annette Lovemore agreed.

The EFF, which sponsored the motion to insource security staff in November, said that the council agreed to do away with the use of private security.

EFF councillor Lukhanyo Mrara said the problem of not having enough money to insource more guards would be resolved if the municipality stopped using the private firms.

“The council motion said we must do away with contract security,” Mrara said.

But Lovemore read out the council resolution – which did not state that private firms should not be used.

ANC councillor Kolekile Boqwana wanted to know how private firms were being paid if there was no budget to pay them, asking why that money could not be used to absorb the remaining security staff.

Committee chair Makhi Feni said increasing property rates to pay for insourcing could not be an option.

“Budget and treasury [department] must broaden their capacity of creativity around the issue of finance.”

The committee agreed to amend its staff organogram for the safety and security department to make provision for the new positions and that the positions be filled when there was budget available to do so.

‘The reduction of costs will only be realised by council on a long-term basis’ Nosipho Xhego

ACTING EXECUTIVE DIRECTOR, CORPORATE SERVICES