Councils warn water reform replacement leaves regions with funding gaps

Councils across the country are warning that the Government's "locally led" model for water services delivery leaves a funding gap that will fall on ratepayers, with rural and provincial districts least able to absorb the cost.

Under the new framework, groups of councils are being asked to form joint water organisations that can borrow against their own balance sheets. But mayors from several smaller districts say the numbers simply do not add up without a larger population base to spread costs across.

"The maths doesn't work for small towns"

One provincial mayor, who asked not to be named ahead of a council vote, said modelling showed water charges could more than double over a decade in the smallest districts. "The maths doesn't work for small towns going it alone," they said.

Local Government Minister Claire Donnelly rejected the characterisation, saying the model gave communities "control over their own assets" and that transition support was available for councils that chose to combine.

Councils have until the end of the year to submit their delivery plans to the new economic regulator.