Water pipe repair, Havelock North

The Government has introduced legislation that would enable our local councils to shift their direct responsibility for water services to new separate entities, getting the funding problem off the councils’ balance sheets.

Here’s the Bill’s explanatory note: “This Bill requires councils to provide transparent information about the current state of water services and to set out proposals to achieve financially sustainable water services that meet regulatory standards. With greater oversight and support from the Government, councils will have the flexibility and discretion to determine the optimal structure, delivery method, and funding and financing arrangements for their water services.”

Council(s) plans are due within 12 month’s of the Bill’s passage.

Which means simply this:

At some point in the future here in Hawke’s Bay you will get three rates bills instead of two, from:

  1. Your friendly Hastings, Napier, Wairoa or CHB Council
  2. Your friendly Regional Council
  3. Your friendly new Water Services Provider

This arrangement is designed to give councils more headroom to borrow for things like roading, flood protection, facilities and other infrastructure.

Basically the same funding stratagem that the Labour Government proposed, but pared back geographically to the point where less economies of scale will be achieved.

The Bill would require territorial authorities to submit water services delivery plans. The plans would set out a strategy for delivering financially sustainable water services and meeting regulatory standards. The expectation is that a region like ours will create a new councils-controlled water services organisation, as our four mayors have advocated.

The Bill also would establish an alternative consultation process to be used if councils do seek to set up a new entity, so as to avoid duplicative consultation processes.

The Bill includes provisions that effectively allow the Government Minister to appoint a ‘Crown facilitator’ and/or ‘Crown water services specialist’ to intervene if a council(s) plan doesn’t materialise or doesn’t satisfy the legislation’s expectations (as determined by the Secretary for Local Government) or to facilitate agreement among disputatious councils.

The announcement teases a further Bill, to be introduced in December 2024, that “will set out a comprehensive range of options, tools and models that will enable councils to exercise those choices, contingent on meeting criteria for financial sustainability.”

Drip … drip … drip.

In previewing its approach previously, the Government has said it will keep a watchful eye on the new regional entities, so that they don’t fall victim to the same politics as the councils – i.e., underspend on vital infrastructure – and don’t fall short on protecting water safety.

Central government oversight … yes, and healthy. Central government funding support … doesn’t appear to be in the cards.


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