This is shaping up to be the most critical decision that Waipā District Council will have made since it was formed in 1989 and I want residents to be well informed.
I have been a member of the Local Water Done Well Project Control Group (LWDW PGG) considering the current proposal and was a previous member of the Waikato Water Study group involving Hamilton City and Waikato District Councils.
I’m happy to continue with the process, and listen to the community feedback on the preferred option of forming a multi-council waters entity or CCO (i.e. Council Controlled Organisation). As further details are finalised, I will be checking that it all makes economic and organisational sense. There needs to be measurable and tangible positive outcomes from going with the change from both the Waters business perspective and also what is left as the residual council business.
Factors that are shaping my thinking:
NZ push for better evidence-based decision making and policy implementation.
The Gluckman Report on ‘The role of evidence in policy formation and implementation’ (2013) for the New Zealand Government opens with the quote:
“We have to make sure what looks like a good policy idea is backed up by solid evidence and quality analysis” (p.2).
The report notes that globally, the more rigorous employment of evidence for shaping policy as well as following through in weighing up its implementation is gaining recognition (p. 3). I believe Waipā should also be following this approach.
Drivers of Change
Central Government’s water reform programme is one of the main drivers of these changes, and Waipā has participated in that process constructively and proactively. Because of the greater capacity to borrow that water entity CCO’s will be granted through legislative changes, taking advantage of this makes sense to help manage the debt constraints that Waipā is facing both now and will likely continue to grapple with in the future. Access to debt capacity has been identified by water reform researchers as one of the main reasons behind these restructures. The consultation document also lists other non-financial benefits that are expected from forming a multi-council CCO.
Economies of scale aren’t a big feature of the Waikato Water Done Well (WWDW) proposal but there is another aspect of restructuring services that can unlock higher efficiency in public services that is also important to me: best practice internal processes, e.g. culture and people, and working collaboratively to achieve those savings. The WWDW option looks to be well placed to do this as there is a great willingness on the partner councils to find these efficiencies. They are all of a rural/provincial nature and have similar cultures too, which should make it easier to work together.
Importance of Regulation and Institutional Settings
In their conclusions on the question of efficiency for water services, economic regulation has been identified as critical for improving performance where monopoly conditions occur (Abbott & Cohen , 2009. Institutional settings are seen by other researchers as important influences on efficiency and outcomes (Walters and others, 2009; Ferguson and others, 2013). Abbott & Cohen (2009, p. 21) identify from American research that price caps are the most effective for enhancing productivity and efficiency. The current Government’s approach is to have robust regulation around pricing and consumer protection (Commerce Commission), public health standards (Taumata Arowai) and environmental protections (Regional Councils) which was not the case with the previous 3 Waters Reform process.
While such command and control regulation is influential, another critical dimension is equity and local voice, so I will be emphasising their importance in the final shape of any water services entity.
Emerging International Best Practice
Water is an environmental good with wider dimensions and values that are integral and inseparable from it, and determining the future management of water resources needs to encompass more than simply economic efficiency. Researchers emphasise the importance of hybridised governance for achieving effective sustainable urban water management where good cross-sector participation is desirable (Van de Meene & Brown, 2009; Van de Meene, Brown & Farrelly, 2011). Regarding waters governance, the Global Water Partnership (GWP) is an international network open to all organisations involved in water resources management including developed and developing country government institutions, agencies of the United Nations, and members from the professional and private sector in 172 countries around the world. The GWP is also a strong advocate for accommodating the wider values of water using the concept of integrated water resources management (IWRM) as a means to ensure equitable, economically sound and environmentally sustainable management of water resources and provision of water services. In the opening to their report, Effective Water Governance, (Rogers & Hall, 2003, p. 4), they assert that waters governance is ‘intensely political’ and has to be politically, socially, environmentally as well as economically efficient, promoting civic participation and including protections for the vulnerable. They favour open information networks and hold the view that the laissez-faire free market policies of the early 90s have not worked for water services. This speaks to me of the role of mana whenua and/or iwi should have in the proposed changes.
Benchmarking
Benchmarking is identified by researchers as important for providing critical empirical evidence following the implementation of water reforms on aspects such as control, transparency and competitive comparison, so I am keen to ensure compliance reporting is fit for purpose without being too onerous.
By benchmarking metrics such as productive activity and efficiency, useful information would be available to guide water services management and authorities which could drive improvements and also design better public policy for the industry more generally (Picazo-Tadeo, González-Gómez & Sáez-Fernández, 2009, p. 763).
References
Abbott, M., & Cohen, B. (2009). Productivity and efficiency measurement in the water industry. Utilities Policy, 17 (3-4), 233–244. Available at http://nzae.org.nz/wpcontent/uploads/2011/08/Productivity_and_efficiency_measurement_in_the_water_indust ry.pdf.
Ferguson, B. C., Brown, R. R., Frantzeskaki, N., de Haan, F. J., & Deletic, A. (2013). The enabling institutional context for integrated water management: Lessons from Melbourne. Water Research, 47(20), 7300–7314. doi:10.1016/j.watres.2013.09.045
Gluckman, P. (2013). The role of evidence in policy formation and implementation. A report from the Prime Minister’s Chief Science Advisor. Auckland: Office of the Prime Minister’s Science Advisory Committee. Available at http://www.pmcsa.org.nz/wp-content/uploads/The-roleof-evidence-in-policy-formation-and-implementation-report.pdf.
Picazo-Tadeo, A.J., González-Gómez, F., & Sáez-Fernández, F.J. (2009). Accounting for operating environments in measuring water utilities’ managerial efficiency. The Service Industries Journal, 29 (6), 761–773.
Rogers, A.W. & Hall, P. (2003). Effective Water Governance. (TEC Background Pagers No. 7). Sweden: Global Water Partnership. Available at http://www.gwp.org/Global/ToolBox/Publications/Background%20papers/07%20Effective% 20Water%20Governance%20(2003)%20English.pdf.
Van de Meene, S.J., Brown, R.R., (2009). Delving into the ‘Institutional Black Box’: revealing the attributes of future sustainable urban water management regimes. Journal of American Water Resources Association 45, 1448–1464.
Van de Meene, S. J., Brown, R. R., & Farrelly, M. A. (2011). Towards understanding governance for sustainable urban water management. Global Environmental Change Part A: Human & Policy Dimensions, 21(3), 1117–1127. http://doi.org/10.1016/j.gloenvcha.2011.04.003
Walter, M., Cullmann, A., Hirschhausen, C., Wand, R., & Zschille, M. (2009). Quo vadis efficiency analysis of water distribution? A comparative literature review. Utilities Policy, 17(3/4), 225- 232.