The Gauteng government has approved a far-reaching consolidation of its existing suite of provincial agencies, many of which are either underperforming, or have overlapping mandates, into three streamlined units - a move that could generate yearly savings of R100-million.

In a frank Budget address to the Provincial legislature on Friday, Economic Development Member of the Executive Council (MEC) Firoz Cachalia confirmed that the restructuring, which includes the controversial Blue IQ agency that paid 12 board members more than R4-million for 13 meetings in 2009/10, would take place over the next three years.

Revelations relating to the payment of "excessive" fees to Blue IQ board members emerged during an agency review. But they were only brought into the public's domain after the Democratic Alliance's Jack Bloom tabled a question in the Gauteng legislature to which Cachalia responded.

The MEC also acknowledged that "probity" needed to be restored to the department as a whole, noting that a total of 99 adverse findings were identified by the Auditor-General. In fact, the audit outcomes for 2008/9 resulted in 11 findings disclaimers, ten qualifications, 26 emphasis of matter and 52 categorised as other.

Cachalia unveiled ‘Operation Clean Audit' aimed at improving compliance with the Public Finance Management Act and other standard accounting practices.

Part of the clean up related specifically to the plethora of government agencies, where the "current structure . . . is characterised by high personnel costs, functional and operational duplication, and strategic misalignment".

Some R40-million would be set aside over the next three years to support the overhaul.

A new ‘Growth and Development Agency' would be created, rationalising Blue IQ, the Gauteng Enterprise Propeller, which supports small and medium-sized enterprises (SMEs) and the Gauteng Economic Development Agency, into one unit.

For the upcoming three years, Cachalia said that Blue IQ's budget would decrease from R1,2-billion to R727,7-million, primarily as a result of the termination of the controversial motorsport contracts. Some R149-million had been allocated to the Automotive Industry Development Centre for "antirecessionary programmes", while R16-million was allocated for sectoral industrial policy interventions and R31-million has been allocated for SMEs and cooperatives in the automotive sector (already mentioned). A further R130-million was set aside for so-called "green jobs" and the transition to a low-carbon economy.

The Gauteng Economic Development Agency's budget, meanwhile, was cut from R192-million over three years to R173-million, with R66-million allocated in the current financial year.

The second agency grouping would focus on marketing and would comprise the Gauteng Tourism Agency and other similar marketing agencies.

The third agency would be be a regulatory agency, focusing on effective regulation, regulatory oversight and compliance. In the interim, however, the Gauteng Gambling Board and Gauteng Liquor Board (GLB) would not be consolidated, until operational difficulties at the GLB had been ironed out.

"The GLB has many weaknesses which manifest in backlogs regarding liquor licensing, regulation and compliance," the MEC acknowledged, while reporting that its budget had been increased by 74% R29-million in 2010/11 to support the turnaround.

A total of R73-million had been allocated over three years to improve the efficiency, service delivery and effective oversight and enforcement by the GLB.