Govt adviser urges big shake-up of local government water services

All local councils should start charging ratepayers for both drinking and waste water by volume, while new water infrastructure should be delivered regionally because of its high cost for smaller communities, says a government advisory group report.

Chaired by Wellington Regional Council chair Fran Wilde, the report was quietly released on the Department of Internal Affairs website on Wednesday, and is said by close observers to have been watered down to appease local government political sensitivities.

Among the most controversial recommendations is one that councils should “consider moving delivery of potable water and wasterwater to regional level, with the management and implementation of such delivery at arm’s length from political decisions” by using a council-owned corporate structure.

The original report recommended councils be instructed to regionalise water services, rather than merely consider them.

Water New Zealand said in a statement it supported “rationalising water services and placing them at arms-length from local political control.”

“However, the real concern Water New Zealand has is whether the reforms proposed by the expert group looking at local government infrastructure will be implemented,” said the lobby’s chief executive, Murray Gibb.

“The need for reform has been known for a long time, but to date little progress has been made.”

“Ratepayers and taxpayers will get improved services and better value for their money if the reforms are implemented. The proposals accord with industry best practice and should be supported,” he said.

The EAG report also proposes creating a Minister of Water and ensuring that all water policy issues are led from one government agency.

It also proposes that “where economically justified, metering and volumetric charging for water are implemented.”

More broadly, the report recommends councils should “consider amalgamation into unitary authorities with minimum populations of approximately 100,000.” Figures in the report show some 75 percent of all local government entities are servicing populations of fewer than 50,000 people.

The report warns that New Zealand local government is currently not well arranged to handle the many hundreds of millions of dollars of new infrastructure which will be required over the next few years.

That’s partly because councils both small and large struggle to find infrastructure expertise, often fail to collaborate, and because of evidence that many New Zealand councils don’t plan or execute capital works projects efficiently, creating cost for ratepayers and the economy.

New Zealand has seven ministries, eleven regionally based regulators and 67 suppliers with responsibilities for water, said Gibb.

“Having 85 businesses providing water governance for a population of 4.4 million is plainly inefficient, and doesn’t allow for a coordinated or strategic approach. By contrast, Scotland with a larger population has just four businesses doing the same job. Just one business delivers water services across the whole country,” he said.

“Metering and volumetric charging has generally proven to be the most equitable way of funding water services, as has been found in Tauranga and Auckland” and still allowed water services to be publicly owned.

The report recommends the Local Government New Zealand umbrella group establish a “local government centre of excellence” service that could offer help across the country on looming major roading and water projects.


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