The Nationalisation of Council Water Services

In June 2017 the National-led government launched a process that could lead to the nationalisation of the water, sewer and drainage services currently owned and operated by local councils. Nationalisation would be an extreme and draconian outcome so why would the government even consider it? It's hard to say because the "case for review" is thin; populated by untruths, half-truths and crucial omissions.

For instance the paper complains (para 16) that the sector has "minimal central oversight to provide transparency, address challenges, and actively encourage service improvements". This is simply untrue. The real problem is that central government is not organised enough to collate all the public information that is already available. For a start the provision of potable water is totally regulated by central government and their agencies. Any member of the public can go to the Ministry of Health's website and read reports on the performance of councils and other water suppliers with respect to the Drinking Water Standards devised and published by the Ministry of Health. The same Ministry of Health via District Health Boards is the absolute gatekeeper of whether a council is a registered water supplier. It is true that the rules about what sewer and drainage systems are allowed to discharge to land or water is set by regional councils during the consenting process but those rules are based on standards set by the Ministry for the Environment and the Ministry of Health. Those discharges are monitored and data kept by the regional councils. So, central government already sets the standards councils must meet through their water systems and the data already exists on how those standards are being met. Central government just needs to get its act together and collate the data if it wants re-assurance that its own rules are being complied with.

The Havelock North gastro outbreak gets a mention (as you would expect). It is worth bearing in mind that the Inquiry into the outbreak concluded that the most likely cause was a highly improbable combination of factors and that all players had followed central government rules to the letter. As for the Mangawhai Heads Sewer debacle at Kaipara District, it was simply a failure of governance; it could just as easily have been a library project as a sewer project. I wouldn't count either event as an indicator of problems in the provision of water services.

Unbelievably, rocketing house prices in Auckland are blamed on the inability of citizens to know what is going on in their water systems!

It will also be news to the Auditor-General that there is "little consistent, reliable information on the state and performance of three waters systems" (para 19). Since 2006 the A-G has required councils to base their Ten Year Plans on properly constructed asset management plans. These are assessments of the current state and performance records of all assets including the three waters. They include a pro-forma work-plan for anything up to thirty years for extending, replacing and upgrading assets. So this year's TYP round will be based on the fifth revision of council asset management plans.

There's more but, all in all, I found the case for the review entirely unconvincing and, in places, bordering on the incoherent.

The worst aspect of it is a significant omission: public health outcomes. If we had a current or emerging problem in water supply and to a lesser extent in sewer we would see it in the incidence of communicable disease outbreaks. Fortunately the Ministry of Health has been publishing a surveillance report on disease outbreaks for some years. The graph below shows the total number of cases of communicable disease each year normalised for population growth. Then broken out are the figures for water-borne and food-borne disease:

I have included the cases where water transmission is implicated in an outbreak but was not the primary mode of transmission. Had I only included the cases where water was the primary mode of transmission the numbers would barely have ticked above zero. By the way these figures include the Havelock North gastro outbreak which was the worst single outbreak of communicable disease since these reports began. Yes, it's that uptick in 2016.

The graph tells the story. Water just doesn't look like a problem either trending or relative to other public health issues. Any desire to fix the system, therefore, has to be based on fear of what might change one day.