What does Local Water Done Well mean?

Local Water Done Well (LWDW) is the Government’s plan to address New Zealand’s water infrastructure challenges.

It aims to provide local councils with the choice of how they will provide reliable and safe water services to their communities over the next 30 years and beyond.

Under LWDW councils can choose to deliver water services themselves, with other councils, or through other arrangements so long as they can show their choice will meet the Government’s core requirements. These include cost effectiveness and affordability, financial sustainability, and compliance with legislation. Councils and water organisations will not be able to privatise water services under LWDW.

Water and wastewaster delivery needs to meet the following:

• Will be financially sustainable – meaning income from water services delivery meets all costs, including service, investment and finance costs.

• Ensures sufficient investment to meet the needs for replacement and renewal of existing infrastructure, and building new to meet future demand.

• Is cost-effective and affordable, with prices that reflect the costs of delivery.

• Is ringfenced, or completely separate from the rest of Council’s income and expenditure.

• Meets other new financial and regulatory requirements.

Councils must complete a Water Services Delivery Plan (WSDP) by early September 2025, showing how their proposed choice meets these requirements. We’ve produced draft WSDPs for both options considered in this document and both are viable under the existing legislation.

Any proposed model and plan has to meet Government criteria. If the Government is not satisfied that a preferred plan meets requirements, it can step in to help.

Funding water services delivery

One of the features of LWDW is that water services organisations that are separate from councils can borrow up to five times the amount of revenue they receive. This is about twice the ratio that most councils are permitted.

Borrowing (using debt) to fund infrastructure investment spreads the cost of something that can be very expensive over the entire time of its useful life. That means it’s paid for by all the people who benefit from it. Debt can spread costs over many years, keeping charges to consumers fairer and more affordable.

Any borrowing by a water service organisation must be guaranteed by its owner council or councils.

If you want to dive a bit deeper, there is a lot of information about Local Water Done Well, as well as links to the new regulation and the current Water Services Bill on the Government’s Department of Internal Affairs website: www.dia.govt.nz/Water-Services-Policy-and-Legislation