By Nick Leggett, Chief Executive, Infrastructure New Zealand
Aotearoa New Zealand’s water debate may have moved beyond arguments over ownership and governance, but the hardest part is only just beginning: delivering the massive infrastructure upgrades needed to fix aging networks, improve resilience and prepare communities for a changing climate.
It has become fashionable in some circles to say that Aotearoa New Zealand has finally ‘sorted’ water reform. The argument goes that Local Water Done Well has drawn a line under the institutional upheaval of recent years, settled the ownership debate and put the sector on a more pragmatic footing.
While politically convenient, it is only partly true. Reform means we have taken a step towards improvement, but we are now entering the hard and, for many, the boring part: execution.
The argument about structures, ownership and governance was always only the prelude. The real challenge is physical: fixing thousands of kilometres of aging pipes, renewing treatment plants, managing stormwater, reducing leakage, improving resilience, protecting rivers and streams, and paying for decades of underinvestment.
That work will define whether Local Water Done Well succeeds or fails. And this is where New Zealand should pay very close attention to what is now happening in the United Kingdom.
The UK Government recently released its new white paper, A New Vision for Water. It is, in many respects, a quiet admission that the water model introduced in the 1990s did not produce the long-term outcomes many hoped for. Public trust has deteriorated. Environmental performance has come under intense scrutiny. Regulators have become increasingly complex and fragmented. Aging infrastructure remains under enormous pressure. Water companies, which are overwhelmingly privately owned, have accumulated large debts while struggling to maintain legitimacy with customers and government alike.
The United Kingdom is now attempting to repair a system after more than three decades of drift, fragmentation and declining public confidence.
New Zealand has an opportunity to learn from that before our own system hardens into long-term dysfunction.
The lesson from the United Kingdom is not simply that ‘privatisation failed’; that is too simplistic and ideologically driven. After all, it’s likely that even under the Starmer Labour Government, privatisation will remain. The more important lesson is that regulation and financial engineering are not substitutes for strong asset stewardship and disciplined infrastructure delivery.
You cannot regulate your way out of decaying pipes; that takes investment and delivery. And you cannot spreadsheet your way to resilient infrastructure if the underlying assets are not being renewed fast enough.
For too long, infrastructure debates in many countries have focused heavily on governance charts, ownership structures and institutional theory. Those things matter, but they are not the same as delivery capability, they are not the same as engineering excellence, and they are certainly not the same as replacing aging networks before they fail.
At its core, New Zealand’s water challenge is now an engineering and execution challenge.
That means the country needs to become hyper-focused on long-term asset renewal, practical delivery capability, resilience, network condition, programme management and public accountability for physical outcomes.
The UK experience offers several important warnings. First, New Zealand must avoid treating finance as a substitute for stewardship. One of the major criticisms of the UK model is that parts of the sector became overly focused on financial structures and balance sheets, while underground assets continued to deteriorate. Pipe replacement rates declined. Maintenance was often deferred. Public frustration grew as bills rose while service confidence weakened.
New Zealand should resist any model that incentivises short-term financial optimisation at the expense of long-term asset condition. In other words, higher bills are coming and consumers do need to pay them. We need to remind ourselves that a healthy water system is not one with the neatest governance structure; it is one where the physical assets are measurably improving year after year.
Second, New Zealand should avoid excessive regulatory fragmentation. The United Kingdom now has multiple overlapping regulatory bodies and accountability layers, and even British policymakers increasingly acknowledge the complexity this has created. New Zealand should be careful not to replicate that maze.
Regulation is important. Economic regulation, environmental regulation and drinking water standards all matter enormously; but regulation alone is not the answer. In some cases, excessive fragmentation can actually obscure accountability rather than strengthen it. This is why Infrastructure New Zealand believes there is merit in considering two additional system leadership roles: a water ombudsman and a national chief engineer for water infrastructure.
A water ombudsman could provide independent consumer advocacy and dispute resolution, improve transparency, and help rebuild public confidence as investment programmes ramp up and household costs inevitably rise. Water reform will only succeed if the public believes someone independent is standing up for service outcomes and accountability.
But perhaps even more important is the idea of a national chief engineer. The next 20 years of water reform in New Zealand will not primarily succeed or fail because of lawyers, consultants or governance diagrams. It will succeed or fail based on engineering quality, asset management discipline, delivery capability and technical leadership.
A respected national chief engineer could help provide independent technical oversight and long-term stewardship thinking across the system. They could benchmark network performance, identify emerging resilience risks, promote best practice asset management and innovation, and provide practical advice to both central and local government.
Critically, such a role could help ensure the system remains grounded in physical reality because, ultimately, pipes either get renewed or they do not. Treatment plants either meet future standards or they do not. Stormwater systems either cope with climate pressures or they do not. No amount of institutional rearrangement changes those fundamentals.
The third lesson from the United Kingdom is the importance of moving from reactive maintenance to proactive renewal. Many infrastructure systems around the world, much of ours included, fall into a ‘fix on fail’ culture. Assets are patched repeatedly because replacing them properly is politically difficult and financially expensive. Over time, resilience erodes and costs compound. New Zealand cannot afford to continue operating like this.
We need much stronger national and public visibility over:
- asset condition
- replacement rates
- leakage
- resilience performance
- long-term investment pipelines signalled to the public and industry.
The country should also become much more data-driven in managing water assets. Consistent national asset standards, digital monitoring, predictive maintenance technologies and transparent public reporting all need to become part of the normal operating environment.
The public should be able to see whether the system is improving.
Finally, the UK experience shows how quickly public trust can collapse once people lose confidence in outcomes. In Britain, sewage overflows and environmental concerns became symbolic of wider system failure. Once public legitimacy erodes, every investment increase becomes politically contentious and every reform debate becomes polarised.
New Zealand might just have a chance to avoid that outcome if we build confidence across the system from the outset – but only if we are honest with the public about the scale of the challenge ahead.
There is no cheap or painless solution to decades of underinvestment. Bills will rise. Major construction disruption will occur. Long-term borrowing will be required. Difficult prioritisation decisions will have to be made. The key is ensuring that New Zealanders can see visible progress in return. That means moving the debate beyond ideology and into execution.
The real test of Local Water Done Well will not be whether people agree with the governance model. It will be whether, 10 or 20 years from now, New Zealand has:
- fewer leaks due to planned executed, not reactive, renewal
- cleaner rivers and streams
- more resilient networks
- modern treatment plants
- infrastructure that communities can rely on.
The United Kingdom is now trying to repair problems that accumulated slowly over decades. New Zealand has the advantage of seeing many of those problems in advance. We should use that opportunity wisely and not compound our problems and pretend that structural reform means ‘job done’.
The next phase of water reform is no longer about arguing over the system; it is about proving we can actually deliver one.