Water Services Reform

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We're continuing to work closely with councils as we transition to the new Water Services Entities. 

The programme will see the three water services – drinking water, wastewater, and stormwater – shift from being delivered by 67 individual councils to 10 new Water Services Entities (WSEs).

It’s estimated that between $120 billion and $185 billion is required to maintain and improve our water infrastructure over the next 30 years. The programme allows for a greater focus on water services and enables the long-term strategic investment that is out of reach of individual councils alone.

The water services programme will change the way we deliver our water services to enable us to meet the challenges ahead caused by ageing infrastructure, historical under-investment, and the impacts of climate change and population growth.

Owned by Councils but operationally and financially independent
The new Water Services Entities (WSEs) will be owned by local councils on behalf of the public; however, they remain operationally and financially independent from them. The balance sheets of WSEs are required to be sufficiently separate from local government, to allow them to achieve higher levels of financial leverage than local authorities can obtain on their own.

Find out more about the new Water Services Entities

Local voice and representation
The 10 Water Services Entity model ensures the entities are closely connected with the communities they serve. 10 entities means that every council, and therefore every community, is represented on the entities’ regional representative groups.

The WSEs will be required to consult with their customers, businesses, and residents on their strategic direction, investment priorities, their prices and charges, and work closely with local authorities to ensure water infrastructure provides for growth and development in spatial plans. The entities will have to report on how consumer and community feedback was incorporated into their decision-making.

Council funding
The Government has developed a package to support the councils through the transition. This package will ensure that local authorities are supported through the transition process, the financial impacts of reform are managed and importantly, all councils and communities will transition to the new system for delivering three waters services in a better position than where they are now.

  • Councils throughout New Zealand have received funding as part of the transition, including:

    • Three Waters Stimulus funding – $523 million to invest in three waters infrastructure (drinking water, wastewater, and stormwater)
    • Better Off Funding - $500 million (tranche one*) to invest in local community wellbeing
    • Transition Support Funding - $44 million to support activities relates to water services reform, paid in instalments across 12 months up until 30 June 2023.

In addition, $500 million of “No Worse Off” funding will be made available acknowledging that the transition process gives rise to costs and financial impacts for councils. The funding will ensure no council is left worse off as a result of bearing stranded costs, or because of the net impacts that the combination of losing revenue and debt could have on their credit ratings. 

* As part of the changes to water services reforms announced in April 2023, the Government decided not to move ahead with the $1.5 billion second phase/tranche of better off funding for councils to ensure the water services entities are able to operate sustainability.

Find out more about the April 2023 changes. 

Council and LGO water services workforce

Council and LGO (Local Government organisation) employees whose primary role is to deliver or support water services will be guaranteed a role with their local Water Services Entity under a legislated process. They will be able to keep their current employment agreement, choose to accept a new employment agreement or as union members may participate in bargaining for a new collective agreement.

Those current council employees who fall into the water services categories will be supported through a transition journey that will help them understand the programme and transition process, the implications of this work, and how it might affect them and their current organisations. A key focus of the transition work in this area is to mitigate any adverse impacts for transitioning staff, and successfully prepare and connect them with their new WSE ready for stand-up.

Visit Te Rapunga for more detailed information on the staff transition.

Whakapā mai
Contact Us

If you have any questions, concerns, or requests in relation to the transition with Councils, please contact us via this form.