City Hall mulls jobs cut to tame costly wage bill

City Hall has in the past been unable to trim its wage bill after initiating efforts to lay off staff. PHOTO | FILE 

By KIARIE NJOROGE, gkiarie@ke.nationmedia.com

City Hall is mulling a freeze in hiring and a voluntary early retirement plan to reduce its wage bill that takes 60 per cent of its revenues.

Nairobi’s budget review document released last week indicated that it’s keen on removing undisclosed number of staff from its payroll to free money for development and improve the quality of public services in the capital.

The increase in the wage bill has continued to eat into the county’s finances and led to a drop in project spending like road repairs.

The staff headcount currently stands at about 14,300, up from 12,000 in 2010, comprising mostly unskilled workers including sweepers, clerks and watchmen.

“A freeze on non-essential recruitment, outsourcing non critical services and explore voluntary retirement package,” the county proposes in the budget review paper.

“The county government is committed to bringing down the proportion of expenditure on wages to below 50 per cent in the medium term.”

With an annual wage bill of about Sh14 billion against a revenue base of Sh22.9 billion earned from land rates, business permits, parking fees and transfers from the national government, salaries take close to 61 per cent of City Hall’s total expenditure, making the wage bill trimming a prime target of the reorganisation plan.

Excluding the Sh11.3 billion City Hall received from the national government, its wage bill is higher than Sh11.5 billion revenue.

The county has stuck with dubious distinction of maintaining a bloated workforce with lacklustre service delivery like its predecessor City Council of Nairobi.

City Hall has in the past been unable to trim its wage bill after initiating efforts to lay off staff. Now, Nairobi had opted for voluntary retirement to avoid fights with the combative workers union.

The county government inherited 11,000 employees from the defunct local authority and an additional 3,300 employees were seconded to the county after the March 2013 election.

The reduction in wages will prove difficult to implement if the county is unable to offload some of its staff.

Currently, it spends Sh1.09 billion a month on pay but with Salary and Remuneration Commission recommended salary and allowances harmonisation, the monthly bill on personnel is expected to rise to Sh1.2 billion.