In September, the Office of the Auditor-General released a research report entitled Managing the supply of and demand for drinking water. This report discusses the findings of an audit of three District Councils – Horowhenua, Kapiti Coast and Manawatu – and one City Council – Palmerston North.
The audit was undertaken to better understand the challenges councils face in supplying drinking water to their communities. It was also undertaken to identify any sector-level issues that could enable public drinking water supplies to be delivered more effectively and efficiently, thereby reducing costs.
The audit found there are strong incentives for councils to take a supply management approach to drinking water. This is because water supplies in these areas are considered plentiful, and there is political pressures to keep rates and rate increases low.
In the short to medium-term a supply management approach may be appropriate. However, in the long-term this approach risks putting in place solutions that address short-term concerns in a way that does not meet the long-term well-being and interests of the community.
Overall, the audit found that political incentives to minimise costs to voters (such as by limiting rates increases), and financial constraints (because of debt caps or competing priorities) do not support a long-term and sustainable approach to the supply of drinking water.
In addition, there are gaps in the data about drinking water management and infrastructure, including the status and durability of infrastructure. These gaps make it difficult to identify and strategically answer, when it is better to get more efficiency out of existing infrastructure and when it is better to develop new infrastructure. A demand reduction approach requires more detailed data than supply management.
Further, there are no national outcomes that support prudent water use or national requirements to be water efficient. The Office of the Auditor General therefore argues that unless there is limited access to water, there are weak incentives for councils to prioritise water efficiency or water conservation. Taking an approach that includes water conservation and a greater focus on water efficiency could delay new infrastructure development, and produce some cost savings in regards to running costs and the renewal of existing infrastructure.
Influencing how people use water can reduce demand, but other actions can be used to conserve water and improve water efficiency. These include water-efficient fittings and fixtures, alternative supplies for non-potable water use, or detecting and repairing leaks.
The Office of the Auditor General found that all of the councils faced challenges and funding constraints. There are issues specific to each council; however, there are also some common challenges that each council experiences to different extents. These include working with iwi; the completeness and reliability of data and information about infrastructure and water end use; staff capability and capacity; and the under delivery of planned capital spending.
The Office of the Auditor General expects that DIA will consider these findings as part of the Three Waters Review that is in progress.