The government is proposing to reform the drinking, waste and storm water (three waters) sector. The reform will involve amalgamating the water services of the 67 local authorities into four new regional statutory corporations, with centralised management and a new governance structure. The structure will have indirect Board appointment rights for six local authority representatives and six mana whenua representatives. This small group will considerably lessen community voice.
The government proposes to amalgamate the water services of Wairoa District Council into a new statutory corporation called ‘Entity C’ which will see Wairoa included along with the East Coast, the rest of Hawke’s Bay, down to Wellington, and the top of the South Island. This area covers close to one million people and 21 councils - Wairoa would make up one percent of the combined local councils in the entity.
The government has given the Wairoa District Council two choices, ‘opt in’ and join the Reform Scenario or ‘opt out’. The government has committed $18.6 million in funding for Wairoa under the “better off” package.
The key question is, will the Reform Scenario deliver the claimed benefits and will Wairoa be better off under the proposed scenario?
The government’s drivers for change are to achieve higher regulatory standards and minimise the costs to households. The government believes the four new entities will provide an economy of scale and spread the increasing costs over many people.
The government is promising that the Reform Scenario will deliver household bills that are about half the amount that would exist in the ‘opt-out’ Scenario. The government claims that the Reform Scenario will deliver Wairoa residents household bills that average $1,260 by 2051 and improvements in service delivery and affordability.
In contrast, the government’s analysis claims that if Wairoa District Council provides water services as an ‘opt-out’ provider, household bills will rise to $8690 by 2051.
Many Councils cannot understand how the Government has arrived at these figures as they are considerably out of alignment with the long-term forecasts of many Councils.
The Government’s Reform Scenario uses analysis provided by Water Industry Commission for Scotland (WICS), the Scottish regulator of the monopoly water provider Scottish Water. The WICS analysis and modelling underpins the case for reform. The government has relied on WICS for the claims that significant capital investment is needed in the New Zealand water sector, and that amalgamation into four separate entities with accompanying institutional changes is the only way to achieve the cost-efficiencies to make the reform affordable.
Hawke’s Bay’s councils have collectively discussed the impacts of becoming part of Entity C and are investigating options including developing a regional approach.
Wairoa District Council, along with other local authorities, has been asked by the government to consider the evidence and whether the government’s proposal to reform the water sector will deliver benefits to its residents. The Government has given all councils until 30 September 2021 to analyse the proposal and feed back to them.
There are still many unanswered questions around what the reform will look like for our community and who will own the asset of the new entity. It is important we balance status quo against future changes in the regulatory environment, infrastructure, growth, and climate change.
Through our feedback we can clearly state what is important to our community in terms of the balance between retaining a local voice in decision-making and ensuring sustainable, affordable, reliable, and safe water services in the future.
What we don’t yet know:
Please follow this link to let us know what you think: https://forms.office.com/Pages/ResponsePage.aspx?id=tjIqQvlXm0mqj9Nd4Jb-TUMm2xzKIT5Lr8nR4RfrghpUOUU4WEtMS0s0STkzUk9PVlJCT0paUVhVOC4u
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