Central Government is transforming the way drinking water, wastewater and stormwater (the three waters) are delivered in Aotearoa.
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.
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.
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 pursuing the move to transfer responsibility for the infrastructure and delivery of Aotearoa's three waters (drinking water, wastewater and stormwater) to four publicly-owned water service entities.
These four publicly-owned water service entities will ensure all New Zealanders have access to safe, affordable water services that meet their expectations now and into the future. Kāpiti will be part of water service entity C, which covers from Gisborne in the North Island to Tasman in the South Island with about 1 million water connections.
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 confirms 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 progress the establishment of the four entities was progressed in December 2021 and the Select Committee process for the draft Water Services Bill started in early 2022. The new water entities are due to come into force in 2024.
The Government has made the decision to progress the reforms nationally and public consultation will occur nationally rather than via local government.
We anticipate that there will be several opportunities for our community to get involved over the coming years as the reforms are expected to involve multiple pieces of legislation to implement. Progression of this legislation will likely include the opportunity for public submissions via the select committee process.
Council will be reiterating our concerns through submissions at each opportunity and encourages our community to do the same to ensure our local voice is heard.
In June 2021, the Government released four reports as part of the evidence base to support proposed reforms. They follow the initial analysis from the Water Industry Commission for Scotland (WICS) which was released last December. The reports are part of the evidence base for reform at a national level and don’t speak to implications for individual councils.
These reports include:
- WICS final report – economic analysis of water services aggregation – June 2021[PDF, 1.5MB]
- WICS supporting material Part 1 – required investment - June 2021 [PDF, 1.5MB]
- WICS supporting material Part 2 – scope for efficiency - June 2021[PDF, 3MB]
- WICS supporting material Part 3 – costs and benefits of reform – June 2021 [PDF, 4MB]
- Farrierswier report – Three Waters Reform Programme – Review of WICS methodology and assumptions underpinning economic analysis of aggregation – June 2021 [PDF, 2MB]
- Beca report – DIA Three Waters Reform – WICS Modelling Phase 2 – June 2021 [PDF, 653KB]
- Deloitte report summary – final economic impact & affected industries – June 2021 [PDF, 1MB]
- Deloitte report – Industry Development Study & Economic Impact Assessment – June 2021 [PDF, 4MB]
You can find out more about the background to these reports on the Department of Internal Affairs website.
Our Council has 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 is 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.
Read more about What's next.