Local Water Done Well Reform

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Following the serious campylobacter outbreak in 2016 and the Government’s Inquiry into Havelock North drinking water, central and local government have been considering the issues and opportunities facing the system for regulating and managing the three waters (drinking water, wastewater, and stormwater).

The focus has been on how to ensure safe drinking water, improve the environmental performance and transparency of wastewater and stormwater network, and deal with funding and affordability challenges, particularly for communities with small rating bases or high-growth areas that have reached their prudential borrowing limits.

Councils face several challenges to deliver water services in an affordable way into the future; aging infrastructure, the cost of renewals work and increasing insurance costs means that a different approach is needed.

The previous government progressed its water services reform programme during 2020 to 2023 with legislation in support of the formation of independent asset owning Water Services Entities (WSEs).

In February 2024, the coalition Government repealed the WSE related legislation as the first stage of implementing its Local Water Done Well policy.

Local Water Done Well is a new system of government oversight, regulation, and requirements.  Councils will be required to develop a water services delivery plan to transition to a new water services delivery model that can meet regulatory requirements. 

Additional background information is available on the Department of Internal Affairs website.

What's being proposed?

The water services reform will change the way water services are delivered to meet the challenges ahead caused by ageing infrastructure, historical under-investment, and the impacts of climate change and population growth.

The core expectations and legislative requirements of the Local Water Done Well policy are that:

  • Within a year (by August 2025), councils will be required to develop a “water services delivery plan” to transition to a new water services delivery model that can meet regulatory requirements.
  • There will be increased regulation in relation to water quality and infrastructure investment.
  • Financial sustainability of a water service delivery model is required, based on sufficient revenue, ringfencing to fund investment and funding for growth. 

The Minister of Local Government has indicated he expects the Wellington region's councils to work together collaboratively on implementation of Local Water Done Well.

For more details visit Department of Internal Affairs

 

What's happened so far?

March 2025  At a meeting on 19 March, Council adopted its water service delivery model consultation document. You can read the Council report from this meeting here

The consultation opens on 24 March and closes on 27 April, taking place in conjunction with Council’s Annual Plan 2025 - 2026 process.

The consultation document, supplementary information including Frequently Asked Questions (FAQs) and online submission link are available on Council's Let's Korero consultation page (link) or letskorero.upperhutt.govt.nz/lwdw

Hard copies of the documents and information will be available from early April at Whirinaki Whare Taonga, Upper Hutt Libraries, and Upper Hutt City Council reception.

Key points about this consultation:

  • The new legislation states that all councils must consult and decide on a delivery model and submit their water services delivery plan to Government by 3 September 2025.

  • Council is consulting with the community on this in accordance with the alternative requirements of the Local Government (Water Services Preliminary Arrangements) Act 2024 (sections 60-64). This means it is a little different to how other consultations may look, the information available and what we can do.

  • There are only two options that we are asking for feedback on. You can read more about these options in the Consultation Document (link above), and then provide feedback.
    • Option 1 - Our preferred approach: a new multi - council owned water organisation which will own and operate public water, wastewater and stormwater assets/networks.
    • Option 2 - Modified status quo: a modified version of Wellington Water where asset ownership and investment decisions remain with each individual council. As the existing Wellington Water model would not comply with all aspects of the new legislation, this option includes changes required to comply with legislation.

  • We have done some preliminary financial work to enable us to compare different delivery models for your feedback. The financial information provided in the consultation document is not comprehensive. The more comprehensive and final financial information is to be developed for the completed Water Services Delivery Plan for its submission.

  • We are teaming up with the councils (Hutt, Porirua and Wellington City Councils and Greater Wellington Regional Council)

    that would be part of the proposed new water services organisation to gather feedback on the preferred delivery approach. Following consultation, councillors will consider all the feedback and make their final decision on a new delivery model. Although each council will make its own decision, themes from feedback will be shared across all councils, to ensure alignment in the councils’ decision-making.

  • A water services delivery plan will then be finalised based on the confirmed delivery model. Councils are required to submit their plans to the Department of Internal Affairs no later than 3 September 2025 for review and approval.

February 2025  On 12 February, Council confirmed the water service delivery model options to be consulted on with the community from March 2025.  This followed further work on stormwater matters since December 2024 in response to the latest legislation.

The Local Government (Water Services Preliminary Arrangements) Act 2024 specifies alternative arrangements and the delivery model options councils have to develop to consult on with their community. Following this required consultation on the proposed delivery model, all councils are then required to submit their Water Service Delivery Plan (WSDP) to DIA by 3 September 2025 for review and approval.

 December 2024 – The Government released its third piece of legislation to complete implementation of the new Local Water Done Well legislative framework. It is also consulting on introduction of two new levies to fund the regulatory activities of the Commerce Commission and Water Services Regulator Taumata Arowai in relation to its respective roles in the new water services framework.

 On 11 December Council considered a further report on the future direction for regional collaboration on a water services delivery plan. 

The purpose of the report was to:

  • Provide further information on the implementation of the Local Water Done Well policy, including the process requirements for councils to develop and submit a Water Services Delivery Plan by 3 September 2025.
  • Seek endorsement to continue the development of a joint Water Services Delivery Plan and implementation plan alongside other councils in the Wellington region, which proposes the formation of a multi-council owned water organisation for the delivery of water services;
  • Seek direction on the options that will be developed for the mandatory consultation on the Council’s proposed water services delivery model, with the community consultation to be initiated in early 2025 in conjunction with the Annual Plan consultation process.

Additional background information is available on the Council website’s new Let's Korero information page and the Department of Internal Affairs website.

 November 2024 –  On 6 November Council considered a report on the future direction for regional collaboration on a water services delivery plan. 

 The overall decision at this meeting was to continue collaboration with other councils within the Advisory Oversight Group towards the development of a joint water services delivery plan, with the legislatively required public consultation on the future water services model options planned to take place alongside the Annual Plan in early 2025.

October 2024 – The regional water services planning group has released a report to support council decision-making on next steps, to occur during October and November 2024.  

August 2024 – The Government release further policy decisions and information about the Local Water Done Well programme. Relating to this, the Local Government (Water Services Preliminary Arrangements) Act 2024 is enacted on 2 September 2024 to give effect to the policy.

May 2024 – Local Government (Water Services Preliminary Arrangements) Bill is introduced. The Bill lays the foundation for a new framework of water services management and financially sustainable delivery models that meet regulatory standards.

Councils are enabled to start planning future water services delivery and undertake steps to establish, join, or amend council-controlled organisations from the day after the Bill becomes law (expected by late August 2024).

Upper Hutt City Council made an independent submission(PDF, 168KB) to the Bill in addition to a joint submission by Wellington Councils.

March 2024 – Upper Hutt City Council signed a Memorandum of Understanding (MoU) with other councils committing Council to a collaborative and non-binding partnership between councils in the Wellington region to work together robustly and efficiently.

In the process of working together, councils established a joint governance oversight group called the ‘Advisory Oversight Group’ (AOG) made up of council elected members and Iwi representation. The AOG is chaired by Dame Kerry Prendergast; it is not a formal committee and does not have any decision-making rights. There are ten council participants: Greater Wellington Regional Council, Horowhenua District Council, Masterton District Council, South Wairarapa District Council, Hutt City Council, Wellington City Council, Porirua City Council, Upper Hutt City Council, Carterton City Council, and Kāpiti Coast District Council.

The key deliverable from this collaborative process would be a joint regional water services delivery plan, including a high-level design for a future delivery model.

The future model options will need to respond to agreed objectives and consider approaches that are workable, affordable, sustainable, and meet the needs of communities and the environment.

Council can choose to exit the regional process and prepare its own water services delivery plan if that is a better fit for the community. 

February 2024 – Coalition Government proceeds with its Local Water Done Well policy implementation, with the Water Services Act Repeal Bill becoming law and all previous legislation related to the provision of water services was reinstated (cancelling the previous government's reform programme).

14 OCTOBER 2023 GENERAL ELECTION

August 2023 – Three pieces of legislation giving effect to the Government’s reform of water services delivery were enacted in late August before Parliament rose for the general election.

The Water Services Entities Amendment Act and Water Services Legislation Act will be incorporated into the Water Services Entities Act, the core piece of legislation enacting the reform. The Act provides the framework for establishing 10 water services entities, including their functions, powers, and tools for their work, and arrangements for the transition to the new system.

The Water Services Entities Act will be complemented by a separate Water Services Economic Efficiency and Consumer Protection Act (led by MBIE) that establishes an economic regulation and a consumer protection regime as part of the reform of water services.

The majority of the legislation will come into force from 1 July 2024, except for some provisions that enable preparations to be made for the transition leading up to July 2024.

On 25 August 2023 the Minister for Local Government released a preliminary recommended schedule for the establishment dates for the nine water services entities outside of Auckland/Northland. This stated the current preliminary ‘go live’ date for the Wellington region’s Entity G was 1 October 2024 and the Minister was seeking feedback from councils on this.


July 2023 – On 27 July the Governance and Administration Select Committee reported back on the Water Services Entities Amendment Bill

This bill gives effect to its reset changes announced in April 2023 and contains additional policy decisions and transitional arrangements for local government long-term planning, reporting, and rate setting over this period.

Council submission on this amendment bill is available here(PDF, 112KB). You can find more information about the latest bill and the Select Committee report on the Parliament website.

The Government intends to pass all legislation (three bills) to give effect to the water services reforms before the House rises for the General Election on 31 August 2023.


June 2023 – On 8 June the Finance and Expenditure Select Committee reported back on the Water Services Legislation Bill and the Water Services Economic Regulation and Consumer Protection Bill.

On 16 June the Government introduced a new amendment bill to give effect to its reset changes announced in April 2023. The Water Services Entities Amendment Bill also contains additional policy decisions and transitional arrangements for local government long-term planning, reporting, and rate setting over this period.

You can find more information about the latest bill on the Parliament website including the accelerated public consultation process, open until Wednesday 5 July.


April 2023 – The Government announced changes to the water services reforms. The changes are designed to strengthen the connection between local communities and their water services provider while ensuring affordability of services for households.

For more details about the changes and what is proposed, see this fact sheet(PDF, 6MB).

The Government intends to introduce and pass legislation to allow for these changes before this year’s election. This will be subject to the Parliamentary timetable and processes, and include the opportunity for public feedback.

Key aspects of the changes announced are:

  • Moving to 10 publicly owned, specialised water service entities, rather than the four entities originally proposed.
  • Under the 10-entity model, every territorial authority owner – and therefore every community – will be represented on their respective entity’s regional representative group.
  • The 10 new entities will ‘go live’ in a staged approach, from early 2025 to 1 July 2026, rather than the original start date of 1 July 2024 for all entities.

February 2023 – Consultation closed on the latest legislation enabling the reform to progress.

View Upper Hutt City Council's submission to the Finance and Expenditure Committee on the Water Services Legislation Bill(PDF, 115KB) and the Water Services Economic Regulation and Consumer Protection Bill(PDF, 124KB).


December 2022 – The Government introduced two new pieces of legislation further enable the reform to be implemented. The Water Services Legislation Bill and the Water Services Economic Regulation and Consumer Protection Bill are open for public submissions until 12 February.


November 2022 – on 11 November the Finance and Expenditure Select Committee issued its report on the Water Services Entities Bill. The Bill establishes four publicly owned dedicated water services entities that will provide safe, reliable, and efficient water services through improved investment and management.

The Committee considered over 80,000 submissions on this legislation. As a result of submissions, approximately 130 amendments have been made to the Bill. Given the Bill has 228 clauses (plus schedules), the number of changes to address feedback is substantial and significant.

You can find more information in this summary of the proposed(PDF, 160KB)  changes or the full Select Committee report on the NZ Parliament website. 


August 2022  - Council considered a report and agreed to allocate the first tranche of $3.9M in better off funding to six initiatives. These are now underway in either planning or early delivery stages.

  • Development of an Integrated Transport Strategy for Upper Hutt $500,000
  • Sustainability Strategy Community Engagement programme $200,000
  • Sustainability Stimulus Grant additional funding $200,000
  • Maidstone Park sand turf floodlights installation $1,000,000
  • City centre upgrade project water main renewal $1,000,000
  • Pinehaven Stream flood protection project additional funding $1,000,000

July 2022 – The Chair of the Government Finance and Expenditure Committee is calling for public submissions on the Water Services Entities Bill. You can make a submission at the New Zealand Parliament Website Water Services Entities Bill.  Closes 22 July. 

View Upper Hutt City Council's submission to the Finance and Expenditure Committee(PDF, 153KB)


June 2022 - on 2 June 2022, the Government announced legislation which will enable the creation of the new Water Services Entities (WSEs). National consultation opened on 10 June 2022.

As well as setting up the new WSEs so they can be ready in two years’ time, the Bill locks in council ownership of the WSEs on behalf of the communities. Councils will have one share per 50,000 people in their area, rounded up – so each council will have at least one share.

The legislation is trying to ensure communities will have a say in the running of the new water organisations through council and iwi oversight, while giving WSEs the financial and operational independence they need to get on with the job. Although the governance and feedback structure is quite complex and convoluted.

You can have your say on the ownership, governance and accountability arrangements of these new entities in the Bill by making a Select Committee submission. Visit parliament.govt.nz to find out more about this process. We are also making a submission.

You will also be able to give your views to the select committee until 22 July 2022.  


March 2022 - in March, Councillors voted to sign up to Communities 4 Local Democracy. We’re one of 31 councils representing around 1.5 million people from Cape Reinga to the Waitaki River and from Haast to Mahia. Communities 4 Local Democracy believe that we can do better than the ‘one size fits none’ proposals from Government, and that we can deliver better services while still being affordable and locally responsive.

Communities 4 Local Democracy supports the higher standards being put into place by the Government’s new water regulator Taumata Arowai. Local Government is ready to work together to deliver these improvements while keeping locally focused and responsive services. 


December 2021 - the Government announced the Three Waters Entities Bill will be delayed to give the working group time to recommend changes to governance and accountability. Draft legislation has been prepared and will be made public, giving the working group until 28 February to report back and recommend any changes. The bill would be introduced to Parliament shortly after.


November 2021 - we launched a residents survey to seek feedback from our community on the Government’s decision to go ahead with the Three Waters Reform, despite concern and opposition raised by councils from across the country.  The survey closed on 28 November and a report on the results went to Council on 15 December. The Government also named the Three Waters working group and released the terms of reference

Initially the Government said there would be a community engagement process, where local communities would be given the opportunity to express their views and provide feedback about the Three Waters Reform.  

In the most recent announcement, the Minister for Local Government indicated there will not be a local community consultation process. Instead, communities/public will have an opportunity to provide feedback through the select committee process. 


October 2021 - the Government announced they would be progressing the Three Waters Reform.


September 2021 - Council submitted its feedback to Government on the Three Waters Reform(PDF, 297KB)


July 2020 - along with announcing the Three Waters Reform, the Government also announced an initial funding package of $761 million to provide a post COVID-19 stimulus to maintain and improve water three waters infrastructure, support a three-year programme of reform of local government water service delivery arrangements (reform programme), and support the establishment of Taumata Arowai, the new Waters Services Regulator.

The initial stage (Tranche 1 – Memorandum of Understanding (MOU), Funding Agreement, Delivery Plan and Request for Information (RFI) process, was an opt-in, non-binding approach. It did not require councils to commit to future phases of the reform programme.

We completed the RFI process over Christmas and New Year 2020/21 and the Government has used this information, evidence, and modelling to make preliminary decisions on the next stages of reform and has concluded that the case for change has been made. Here is the full report on the case for change.

 

How can I find out more information?

Taumata Arowai became a new Crown entity in March 2021 and is the new water services regulator, dedicated to providing safe and reliable drinking water and improved delivery of waste and storm water.

We have greater a further dedicated information page on our Let's Korero site in preparation for future consultation.

For background and more information on the reform visit the Department of Internal Affairs.

Some useful links and documents are below: