Collaboration in the future of water services in NZ

Collaboration critical for local government asset management

In Insight by Jennifer Carew

At a glance

  • With asset managers bracing for the impact of the Three Waters Reform Programme, cross-agency collaboration has never been more important
  • Working under a state of collaboration can mean as little as aligning asset data capture requirements, right through to shared capital contracts
  • Working with a third-party can aid in identifying the common and the varying goals, while also independently identifying and assessing the strengths of each organisation.

There is no doubt about it - the changing asset management and local government landscape is impacting small organisations significantly. From escalating legislative requirements through to the increases in labour and material costs, together with rapid changes in demographics and increasing level of service expectations, additional pressure is being placed on organisations to ‘do more for less’.

In recent years there has been increased scrutiny around the way that Local Government conducts its business, with discussions around the topic of amalgamation occurring constantly. In 2018, a project between three neighbouring councils in Central North Island (Hamilton City Council, Waipa District Council and Waikato District Council) and supported by Local Government New Zealand (LGNZ), found that the current status quo for the delivery of water services was not sustainable.  It explored the opportunity to create a CCO (Council Controlled Organisation) joint service delivery unit, in which the three councils would deliver Water and Wastewater services collaboratively. Whilst the joint venture between these three councils ultimately did not proceed, it sparked robust discussion around the benefits of such a collaboration and opened the door to further conversations.

Fast forward to 2021 and reform remains a hot topic, led this time at a central government level through the Three Waters Reform Programme. This programme represents one of the biggest changes in the structure of New Zealand local government since the amalgamations driven by the Local Government Act of 1974, and every council can expect to feel its impact. There is strong opposition politically from both local government representatives and the New Zealand National Party. However, it is difficult to envision a future for the delivery of water services that is not fundamentally different to the current status quo.

Even if the Three Water reforms currently tabled by the New Zealand Government are not undertaken, or they are repealed should there be a change of government at the next election (as per Nationals public statement), it is obvious that change is needed to resolve the water service delivery challenges that local governments face. This is very likely to include neighboring Local Government Joint Ventures, and shared services agreements.

The Auditor-General Office has repeatedly noted in their reports that “local authorities – and all asset-intensive entities – must be more open to developing relationships with each other and with peer organisations to share experience and knowledge”, a philosophy that is supported by Water NZ and LGNZ.

The case for collaboration

New Zealand's current reforms impact Local Government more broadly than just those involved in the Three Water Delivery and Service teams; the transition of these teams to a separate entity impacts accounting, revenue, IT, HR, Customer Call Centres, planning and development as well as other delivery teams that collaborate on asset management activities within their districts, such as transportation, property, facilities, parks and reserves.

With such significant changes to the wider organisations, and potentially the reduction of inhouse staff and expertise, local government organisations face an escalating challenge in effectively managing their assets, including those outside of the Three Waters. Often Asset Management teams within Local government organisations work across disciplines, ensuring that the expertise is spread over all asset activities. With the potential loss of staff due to the transition of the Three Waters Assets out of councils, there is the potential that we will see a 'brain drain' of asset management staff, as they move into one of the four major entities.

Working under a state of collaboration can mean as little as aligning asset data capture requirements, right through to shared capital contracts; the benefits are realised from all actions, not just those of financial significance. The Waikato Regional Asset Technical Accord (RATA) has shown that simply bringing people together from multiple organisations can benefit everyone, the power of collaboration clearly enabling further success for the organisations involved. Increased resilience in regards to staffing, reduced variations between councils for contractors to manage and the ability to progress the growth in maturity within each organisations' Asset Management Framework are all very real benefits of collaboration.

Significant step change within local government is not unique to New Zealand – Australian Water reforms that initially were implemented in 1994, and then readdressed and extended in both 2004 and 2014 saw a national water reform framework implemented, which transformed the way in which water was managed across Australia. This included the corporatisation of water services, and the establishment of water utility companies throughout Australia, many of which serviced areas greater in size and population than the local authorities previously had.  The benefit of this economy of scale enabled the creation of financially sustainable business practices, and the ability to attract trained staff and management - both principal drivers of the current New Zealand Three Waters Reforms.

What does it take to collaborate?

Working collaboratively with neighboring councils and entities is, of course, a desirable state. However, there are many difficulties that arise. Differences in strategic objectives, priorities, economic conditions, political perspectives, individual approaches and organisational culture can all lead to conflict that is often difficult to overcome without outside intervention. Finding common ground in strategic objectives, legislative standards, and delivery timelines can help push through these difficulties. Sharing programmes and timelines for anticipated and planned capital works to ensure a more consistent loading on the marketplace is an obvious example, particularly for rural and remote regions that may experience limited contractor availability.

Working with a third-party who understands the strategic objectives and long-term goals specified in each organisations' Asset Infrastructure Strategy and the activity management plans (or Asset Management Plans), can aid in identifying the common and varying goals, while also independently identifying and assessing the strengths of each organisation.

How we can help

Clarita is very well positioned to form part of your team, assisting in the transformation and implementation of a collaborative strategy. Supported by past experience in navigating Australia's water reforms, facilitating change and developing Optimisation Roadmaps for asset knowledge enablers, Clarita can offer the benefit of insight across a wide range of organisations that vary significantly in scale and maturity. With feet on the ground in both New Zealand and Australia, Clarita has the capacity and capability to help implement asset information strategies, standards and systems to build asset management maturity within your organisation.

Let's Collaborate!

New Zealand water service providers, or indeed anyone looking for new approaches to asset information management, can contact us to explore how Clarita can help.