The lawyer of then health MEC Qedani Mahlangu has attempted to cast doubt on the evidence of then finance MEC Barbara Creecy on who made the decision to terminate the long-standing contract of Life Esidimeni (LE).
On Tuesday, advocate Laurance Hodes and Creecy had a heated back and forth over a meeting in 2014 where the decision was allegedly made. Hodes wanted her to agree that the decision was made by the premier budget committee (PBC) and not necessarily the health department.
They were estimating that if they reduced their beds in the 2015/16 financial year they would save R50m.
— Barbara Creecy, former Gauteng finance MEC
She replied: “It’s not where we disagree counsel, it’s what the law says. The PFMA is absolutely clear that the only person who has the ability to enter into a contract or terminate a contract is the accounting officer. It’s not a matter of opinion ... it is a matter of fact.
“That’s an opinion you’ve expressed several times today, but I do not agree with you. I think we’ve been over this many times.”
He responded: “I’m not saying the PBC cancelled the contract, but a recommendation was made.”
Hodes was dealing with minutes of PBC meetings in 2014 at which Mahlangu presented that the department was considering shedding the bed use at LE by 20%. Another item was the plan to terminate the contract.
Creecy said the departments were responsible for constructing their own budgets. The bed reduction was part of a presentation that dealt with cost-containment and revenue-enhancement measures by the health department. She said the department of health presented that they planned to issue a final notice of termination of beds in December 2014.
“They were estimating that if they reduced their beds, in the 2015/16 financial year they would save R50m. They were going to place patients in departmental institutions. One would assume this would mean hospitals or other governmental facilities.
“Under risk analysis, they said the departmental institutions may not have adequate capacity to absorb patients from LE.
“They did not talk about terminating the contract but about their bed usage [a reduction of beds]. They said the contract would not be renewed. PBC could not take a decision of that nature [termination],” Creecy said.
This follows the evidence of Mahlangu, who told the inquest the stakeholders who were central to the termination of the LE contract were Creecy's department and former premier David Makhura.
She said the provincial department was under pressure to cut costs by R300m, and Makhura shaped the final decision to terminate the long-standing contract with LE through his budget committee, which ordered the cost-cutting.
She also implicated Creecy.
“The decision to terminate was made through the budget committee, and the premier was alive to all that was happening, including MEC Creecy.”
In her evidence, led by William Mokhare SC, Creecy said during the years under consideration, there was no decrease in the overall mental health budget.
She then testified on the budget allocation for mental health care as constructed by the health department. The budget was allocated specifically to psychiatric or mental hospitals, Life Esidimeni, mental health NPOs and mental health district services.
“There was a variation in the amounts allocated to Life Esidimeni. In that financial year [2013/14], R1.1bn was allocated for mental health services. The actual expenditure was slightly over R1bn, an underspending of R62m.
“The following year there was R1.1bn allocated, the expenditure came to R1.2bn, R47m over-expenditure. In 2015/16 we recognised the overspending and allocated R1.26bn to the department. The spending was R1.22bn, an underspending. The budget increased to R1.35bn, the actual spending was R1.27bn,” said Creecy.
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