Central Government is transforming the way drinking water, wastewater and stormwater (the three waters) are delivered in Aotearoa New Zealand.
This is to give New Zealanders confidence that drinking water is safe to use, sources of drinking water are adequately protected, and wastewater and stormwater are managed in environmentally sustainable ways.
The Reform Programme
In July 2020, the Government launched the Three Waters Reform Programme – a three-year programme to reform local government three waters service delivery arrangements in a way that improves health and wellbeing outcomes to benefit all communities in New Zealand.
The Reform Programme stemmed from the campylobacter contamination in Havelock North’s drinking water supply in 2017 that saw more than 5,000 people become ill, with up to four deaths associated with the outbreak. A two-stage government review ensued and recommended several improvements, including establishing a large, aggregated water supplier and a stronger regulatory regime.
New delivery model
In October 2021, following substantial work to explore an integrated and extensive package of reform to the current system for delivering three waters services and infrastructure, the Government announced that it would be transferring responsibility for the infrastructure and delivery of Aotearoa New Zealand's three waters (drinking water, wastewater and stormwater) to four publicly owned Water Service Entities.
These water services entities aim for all New Zealanders to have access to safe, affordable water services that meet their expectations now and into the future.
In April 2022, Government accepted the majority of reform recommendations made by their Three Waters Working Group regarding representation, governance and accountability. Among other things, this confirmed that:
- local councils will retain ownership of water entities through a public shareholding structure, with shares allocated to councils reflective of the size of their communities (one share per 50,000 people); and
- Regional Representative Groups for each entity will have joint oversight from local councils and mana whenua to ensure community voice and provide tighter accountability.
The Government did not commit to ongoing taxpayer investment in water services which was also recommended by the working group.
Legislation to establish the four entities was passed in late 2022.
Government established a National Transition Unit to implement and oversee the transition of water services delivery from 67 councils to four new water services entities by 1 July 2024.
In April 2023, Government announced a reset of the three waters reform, moving from four water services entities to 10. Our Council is now proposed to be part of Entity G Wellington–Wairarapa Entity rather than the much larger Entity C that encompassed Tairāwhiti/Gisborne, Hawke’s Bay, parts of the Manawatū–Whanganui Region, Wellington, Chatham Islands, and the top of the South Island.
The initial 1 July 2024 transition date has also been delayed, with the establishment date of the entities now taking a staggered approach from early 2025 to 1 July 2026.
The transition to Entity G will impact much of our mahi (work) and our people beyond those who are directly involved in delivering our water services.
For now, we are following what is required of us. This includes providing the National Transition Unit information on things such as stocktakes of our three waters functions and staff roles responsible for service delivery, asset management plans, work programmes and existing bylaws.
In June 2021, the Government released four reports as part of the evidence base to support proposed reforms. They followed the initial analysis from the Water Industry Commission for Scotland (WICS) which was recently released. The reports were part of the evidence base for reform at a national level but didn't speak to implications for individual councils.
You can find out more about the background to these reports on the Department of Internal Affairs website.
Our Council expressed a view that while it supports the overarching principles and objectives of the reform, it has real concerns about the planned approach which it sees as one-size-fits-all, overly complex and difficult to implement.
The Council has been concerned about governance and ownership aspects of the proposed model — specifically, loss of control and connection — and in particular how each council’s priorities would be acknowledged and delivered, and how the voice of local communities would be retained.
We do not consider financial modelling supporting the reform proposals accurately reflected the Kāpiti situation, and projected future financial benefits of the reforms are very uncertain for Kāpiti.
As part of our own due diligence, we engaged international consultants, Castalia, to help us analyse WICS’ model. Castalia’s analysis, Advice on Three Waters – Report to the Kāpiti Coast District Council[PDF 818 KB], along with our own interrogation of the model, has demonstrated that the model does not accurately represent the Kāpiti Coast situation.
Kāpiti has a good track record of delivering quality drinking water, wastewater, and stormwater outcomes for our community and we want to ensure that our community’s needs continue to be prioritised and met in the face of climate change and unprecedented growth.
We are committed to achieving positive three waters outcomes for the Kāpiti Coast community, and we will continue to advocate for our district’s interests.
We are asking the Government for a fair deal. Investing in maintaining and upgrading our three waters infrastructure has meant our infrastructure is in good condition, however we have borrowed money to achieve this and we want to ensure that our ratepayers are appropriately reimbursed for this.
Losing three waters assets also impacts our ability to borrow for other community-based infrastructure and improvements.
The April 2023 reset is a step in the right direction. A smaller entity will still allow for economies of scale while providing better alignment between regional decision-making and local delivery.
We’re also pleased that the initial 1 July 2024 transition date has been delayed.
Unbolting water services from local government is not as simple as it sounds. Water services are intertwined with other council services such as stormwater systems in our parks and under our roads, and many of our people work across multiple delivery and supporting roles.
We need to ensure any transition is affordable and seamless for our community and our people. Rushing through such a significant delivery model change wasn’t guaranteed to do this.