Local Water Done Well - confronting a difficult truth

As Councils grapple with the deadlines set out in the Water Services Reform programme, many are confronting a difficult truth: what communities say they want, and what they can sustainably afford, may not align.

In several districts, consultation results have shown a strong preference for local control or maintaining the status quo. These are understandable positions rooted in concerns about local identity, accountability, and autonomy. But under the new legislative framework, some of these options may be fiscally or operationally unsustainable, particularly in areas with small ratepayer bases, ageing infrastructure, and a backlog of investment needs. Even where water services organisations are being established, many are below the indicative 50,000 connections threshold to obtain favourable borrowing arrangements.

There is an obvious conflict in some of these areas between calling for lower rates increases, while preferring a more expensive in-house model for water service delivery.

This tension between democratic engagement and responsible stewardship is shaping up to be the defining leadership challenge of the current reform era.

The Local Water Done Well legislation rightly requires councils to consult with their communities on preferred delivery arrangements. However, if those consultations result in councils being pressured toward financially sub-optimal options the long-term consequences could be significant:

Water service entities that cannot meet economic regulation thresholds
Council’s being too slow raise revenues now, exacerbating the intergenerational cost burden
Under-investment in core asset maintenance and renewal, requiring costlier catch-up efforts later

The legislation empowers Government to take more direct action where they judge that current decisions and water service delivery plans do not show a financially sustainable pathway. In Northland we have seen a collaborative approach between local authorities and a Crown appointed advisor result in a change of earlier decisions, with the three Councils now voting to form a Northland region water services organisation.

This isn’t to say councils are making the wrong decisions. Many who are continuing with current arrangements have signaled an intention to continue engaging with neighbouring councils to explore joint delivery models or shared services over time.

That’s a positive sign, the key will be ensuring these are genuine pathways toward sustainability, and not just ways of deferring difficult choices to future councils and communities.

Water reform is at the crux of the Local and Central Government relationship at present, and a space we are watching alongside our clients with interest.

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