Local Water Done Well - Where to Next?
By Chris Bowie
It is no secret that councils across the country are facing a great deal of uncertainty on how they make future investment in their 3 Waters infrastructure. This comes at a time when the need for investment in aging infrastructure is increasing, against a backdrop of new regulatory requirements, and with the pressures placed by climate chance and natural disaster resilience.
Government has been signalling its intention to reform the 3 Waters sector through the implementation of its “Local Water Done Well” policy by progressing two further bills through Parliament in the next 18 months.
It was interesting, therefore, to see Minister Simeon Brown’s comments regarding the direction of 3 Waters legislation, which provided the most detail we have seen thus far on the Government’s intended direction.
By mid-year, we can expect to see legislation introduced that:
- Requires Councils to put forward a Water Services Delivery Plan.
- Sets out what they intend to deliver over 10-30 years.
- Requires Councils to identify a financially sustainable approach to 3 waters investment
A Water Services Delivery Plan therefore becomes a critical tool for Councils to align to Central Government requirements. Minister Brown has indicated that these Plans must meet three tests:
- Make sure water revenue is ring-fenced to go back into water assets and service delivery
- Make sure the plan is sufficient and affordable
- Make sure that the plan considers growth
Minister Brown has now also indicated potential future funding mechanisms. These include:
- Formation of regional CCOs supported by legislation to achieve balance sheet separation (if necessary)
- Working with Local Government to tie funding to water revenue
- Taking a user pays approach that is ringfenced to go back into water
- Using the remaining 3 Waters funding from the previous government to assist Councils with CCO planning and establishment.
In our view, this creates a compelling need for Councils to be proactive now to ensure that they are ready for impending structural and funding reform. We are actively supporting Councils to deliver a timely response to this.
How we can help
Rationale is working with several local government agencies across New Zealand to help them understand their 3 waters infrastructure investment and how they can evaluate competing priorities, in a way that sets them up for structural and funding reform.
We take a Business Case approach to achieve the following objectives:
- Ensure our clients are best placed to present to any audience (whether that be its communities, local government or Central government stakeholders) its planned financing, management and delivery of three water infrastructure services for its community.
- Align the programme of works to a mutually agreed strategic direction and priorities, that can be adapted as / when the strategic direction changes.
- Strengthen internal alignment between strategy, planning and delivery across different infrastructure types to provide best value for the community (stop once, dig once, with purpose)
- Enable the supply chain to deliver consistently higher value work at lower cost.
We are successfully using this approach to develop an integrated programme of works across 3 waters infrastructure, and support Councils to identify preferred service delivery and funding models, such as CCOs. To do this, we:
- Work with Councils to establish strategic priorities for three waters investment and/or alternative service delivery models based on the specific needs of their communities.
- Identify options for infrastructure that meets these needs.
- Create a model that produces an integrated programme of work with a 10 – 30 year outlook. This enables Councils to test how their programme of work changes as priorities change.
- Deliver an implementation plan that identifies the preferred model for funding and organisational structure.
If this is a conversation you’re interested in, we’d be happy to share more about our approach. Please feel free to contact one of our key experts:
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Chris Bowiecbowie@rationale.co.nz |
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Chris Frenchcfrench@rationale.co.nz |
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Tom Lucastlucas@rationale.co.nz |
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David Stonedstone@rationale.co.nz |
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